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'"TiSr-'l SENATE {>'-"-r 

THE NATIONAL- BANK ACT 

AS AMENDED 

THE FEDERAL RESERVE ACT 

AND 

OTHER LAWS RELATING TO 
NATIONAL BANKS 



Compiled under the direction of the Comptroller of the Currency 



FEBRUARY, 1920 










t jjJijy J 



' '■' '•' y. 

WASHINGTON 
tJOVERNMENT PRINTING OFFICE 

1920 



SENATE RESOLUTION 298. 

Reported by Mr. Moses. 



In the Senate of the United States, 

February 6, 1920. 

Resolved, That there be printed one thousand five hundred copies 

of the national banking act as amended to date for the use of the 

Senate document room. 

Attest: 

George A. Sanderson, 

Secretary, 



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CONTENTS 



Page. 
Dates of acts relating to National Banks 5 

^ National-bank act and acts amendatory thereof and supplementary thereto 

-^ Bureau of Comptroller of the Currency 11 



h Organization and powers 19 

Obtaining and issuing circulating notes 49 



i;n 



y' Regulation of banking business 69 

Dissolution and receivership 99 

' Federal reserve act 117 

Acts of a general nature and sections of the Revised Statutes not included 

</l in national-bank act affecting national banks ISi 

'^ Special acts relating to national banks 207 

i^ Opinions of Attorney General on guaranty laws of Oklahoma and Kansas 

^ and on the insurance of bank deposits 215 

■^ Index to national-bank act and general and special acts 221 

"^ Index to Federal reserve act 273 

Q Index to sections of Revised Statutes 302 

3 






;i7r>Hi)4 



DATES OF ACTS RELATING TO NATIONAL 

BANKS. 



THE NATIONAL BANK ACT AND ACTS AMENDATORY THEREOF AND SUPPLEMENTARY 

THERETO. 

Page. 

Feb. 25, 1S63. An act to provide a national currency secured by a pledge 
of United States stocks, and to provide for the circula- 
tion and redemption thereof 181 

June 3, 1864. Act of February 25, 1863, repealed and reenacted with 

certain amendments 11-113, 131, 181, 182 

Mar. 3, 1865. State banks converted may retain and keep in operation 

branches 43 

Mar. 3, 1865. Issue of circulating notes. See note under section 5171 59 

Feb. 5, 1867. Penalty for imitating bank circulation 66, 178 

Mar. 2, 1867. Refunding excess tax 94 

Feb. 10, 1868. Taxation of shares of national-bank stock 95 

Feb. 19, 1869. Prohibiting loans on United States or national-bank notes, 

or withholding such notes from use 85 

Mar. 3, 1869. Reports of condition, and earnings and dividends 90, 91, 92 

Mar. 3,1869. False certification of checks 86 

Apr. 6, 1869. Penalty for embezzlement, abstraction, etc 87 

July 8, 1870. Penalty for embezzlement, abstraction, etc 87 

July 12, 1870. Issue of circulation redeemable in gold 65, 80 

July 14, 1870. Liquidating banks to retire circulation 100 

Mar. 1, 1872. Leavenworth struck out as reserve city 1 72 

June 8,1872. Certificates of deposit for United States notes (repealed 

Mar. 14, 1900) 80 

Feb. 19,1873. Reports of State banks 18 

Mar. 3, 1873. Examination of plates and dies 62 

Mar. 3, 1873. Assessment for impairment of capital 83 

Mar. 3, 1873. Use of the word " national " 118 

June 20, 1874. Fixing the amount of United States notes, providing for a 

redistribution of national-bank currency 20, 61, 77, 102 

June 23, 1874. Maceration of United States and national-bank notes 64 

June 23, 1874. Stamps on bank checks. Repealed March 3, 1883. 

Jan. 14, 1875. Aggregate amount of circulation not limited 63 

Jan. 19, 1875. Circulating notes of national gold banks 64 

Feb. 18, 1875. Correcting errors and omissions in the Revised Statutes 13, 

14, 63, 81, 101, 103 

Feb. 19, 1875. Appointment and compensation of bank examiners 112 

Mar. 3, 1875. Salary of Comptroller 11 

Mar. 3,1875. Distinctive paper for printing notes 61 

Mar. 3, 1875. Clerical force for redemption of circulating notes 78 

June 30, 1876. Assessment for failure to pay up capital .stock or for im- 
pairment of capital ; receivers, appointment of 83, 107-110 

Feb. 27, 1877. Examination of plates and dies 62 

Feb. 27,1877. Reports to Comptroller 91 

Feb. 27, 1877. Destruction of redeemed notes 102 

Mar. 1, 1879. Semiannual duty, abatement of 94 

Feb. 14, 1880. Conversion of gold banks 65 

Feb. 26,1881. Verification of returns of national banks 91 

July 12, 1882. Corporate existence, extension of 28-31 

July 12.1882. Issue of gold certificates 85 

July 12, 1882. Punishment for falsely certifying check 86 

July 12,1882. Retirement of circulating notes 55,56 

Mar. 3,1883. Capital and deposits, repealing tax on 91,176,178 

Mar. 29, 1886. Insolvent banks, protection of assets by use of trust 

funds 110. Ill 



6 DATES OF ACTS RELATING TO NATIONAL BANKS. 

Page. 
May 1, 1886. Increase of capital stock, change of name or location— 27, 28, 34 
Mar. 3,1887. Courts, jurisdiction of 28 

Jlar. 3. 1887. Reserve and central reserve cities, providing for additional. 

etc 70-73 

Aug. 13, 1888. Courts, jurisdiction of 28 

July 14, 1890. Disposition of redemption account 79 

July 28, 1892. Stolen or lost national-bank notes, redemption of 79 

Aug. 3, 1892. Agent of shareholders of national bank, appointment of ; 

amends act of June 30, 1876 108 

Jan. 12, 1895. Annual Report of Comptroller of the Currency, printing of_ 15 
Mar. 2, 1897. Appointment and qualification of shareholders' agent ; 

amends acts June 30, 1876, and August 3, 1892 108 

Mar. 14, 1900. Authorizing banks with minimum capital $25,000 ; bonds, 

circulation, taxation, etc 32, 60, 92 

Mar. 3, 1901. National-bank depositaries 42 

Apr. 12, 1902. Authorization of reextension of charter 32 

Apr. •28, 1902. Annual Report of Comptroller to contain information re- 
garding failed banks, list of employees, etc 14 

Mar. 3, 1903. Additional reserve cities ; minimum population, 25,000 72 

Feb. 28, 1905. Qualification of directors, banks with capital of $25,000 35 

Dec. 21, 1905. Taxation of circulation based on Panama Canal bonds 51 

June 22, 1906. Amendment section 5200, loan limitation 81 

Jan. 26, 1907. Political contributions prohibited 87 

Mar. 4, 1907. Additional copies of Report of Comptroller 15 

Mar. 4, 1917. Public depositaries 42 

Gold certificates and United States notes, issue of 192 

Limitation on withdrawal of circulation ; consent of Comp- 
troller of Currency and the Secretary of the Treasury 

neces.sary 56 

May 22, 1908. Additional Deputy Cmptroller 12 

May 30, 1908. Authorizing National Currency Associations, the issue of 
additional bank circulation, and creating a National Mon- 
etary Commission. Expired June 30, 1915. 

Mar. 4, 1909. Codification of criminal laws 66, 179, 182, 185, 186, 187, 188 

Mar. 4, 1909. Additional Deputy Comptroller 12 

Oct. 15,1914. Interlocking directorates 35-39 

May 15, 1916. Amending act of October 15, 1914, relating to interlocking 

directorates 36 

May 15, 1916. Authorizing the deposit of funds of insolvent banks in any 

regular Government depositary 105 

Sept. 7, 1916. Amending laws in reference to real estate loans, reserves, 
acceptances, and foreign branches, and authorizing bank 
to act as insurance agent and as agent in procuring loans 

on real estate 21,23,24,25 

Apr. 24, 1917. No reserve required to be held against United States de- 
posits 77, 190 

Oct. 5, 1917. Limit of issue of notes under $5 62 

Apr. 5, 1918. Liabilities incurred under war finance act, excepted from 

restrictions of section 5202 85 

May 22, 1918. Authorizes contributions to Red Cross during period of the 

war 198 

Sept. 24, 1918. Amend section 5200, Revised Statutes. Limitation of lia- 
bilities that may be incurred by any one person 81 

Sept.26, 1918. Trust company powers of national hanks. Reserve require- 
ments. Amends section 5208, penalty for falsely certify- 
ing checks. Amends section 5209, penalty for embezzle- 
ment, abstraction, willful misapplication, false entries. 

etc. Amends section 22. Federal reserve act 24, 75, 86, 87 

Nov. 7, 1918. Consolidation of national banks 100 

Mar. 3, 1919. Amends section 5172, printing denomination and forms of 

circulating notes 61 

Oct. 22,1919. Amending sections .5200 and 5202, U. S. R. S 81.87 

Jan. 13,1920. Amending section 5182, U. S. R. S 63 



DATES OF ACTS RELATING TO NATIONAL BANKS. 7 

THE FEDEBAL RESEB\'E ACT. 

Page. 

Dec. 23, 1913. Providing for the establishment of Federal reseve banks, 
to furnish an elastic currency, to afford means of redis- 
counting commercial paper, to establish a more effective 
supervision of banking in the United States, and for 
other purposes— 11, 21, 22, 23, 25, 34, 41, 42, 43, 50, 56-58, 74-76, 

83, 87, 88, 89, 112, 117-177, 189 

Aug. 4, 1914. Amending section 27 of the Federal reserve act and section 
9 of the act of May 30, 1908, relative to issuance of addi- 
tional circulation 175, 176 

Aug. 15, 1914. Amending section 19 of the Federal reserve act In reference 

to reserve requirements 75, 76, 159, 160 

Mar. 3, 1915. Amended paragraphs'3, 4, and 5 of section 13 of Federal re- 
serve act superseded by act of September 7, 1916 22, 145 

Sept. 7, 1916. Amends sections 11, 13. 14, 16, 24, and 25 of the Federal re- 
serve act and section 5202, United States Revised Stat- 
utes 21, 22, 23, 25, 143, 144, 145, 146, 147, 149, 165 

June 21, 1917. Amends sections 3, 4, 9, 13. 14, 16, 17, 19, and 22 of the Fed- 
eral reserve act— 22, 50, 74-76. 87, 88, 89. 90, 123, 128, 132-135, 
143, 145. 148, 149, 150, 151, 152, 155, 156. 159, 160 

Sept. 26, 1918. Amends section 22, Federal reserve act 24,75,85,86,87.88, 

90, 127, 140, 153, 159, 162. 163, 164 

Mar. 3, 1919. Amends sections 7, 10, and 11, Federal reserve act— 131, 136, 142 

Sept. 17, 1919. Amending section 25, Federal reserve act 25. 165 

Dec. 24, 1919. Amending section 25, Federal reserve act 167 

ACTS OF A GENEEAI- NATURE AFFECTING NATIONAL BANKS. 

Feb. 21,1857. Foreign coins 186 

July 7, 1838. Issuing circulation of expired association 194 

June 30, 1864. Taxation of State banks 183,184 

Mar. 3,186.5. Taxation of State banks 182,184 

July 13, 1866. Taxation of State banks 182, 183, 184 

Mar. 26. 1867. Taxation of State banks 183 

June 6, 1872. Taxation of State banks 183 

Dec. 24,1872. Taxation of State banks 183,184 

Feb. 8,1875. Taxation of State banks 183 

Feb. 18, 1875. Taxation of State banks 184 

Mar. 1. 1879. Taxation of State banks 185 

Feb. 25, 1862. Taxation of notes and certificates of United States circulat- 
ing as currency 185 

Mar. 3, 1863. Taxation of national-bank notes and notes and certificates 

of United States circulating as currency 185 

Mar. 3, 1864. Taxation of national-bank notes and notes and certificates 

of United States circulating as currency 185 

June 30, 1864. Taxation of national-bank notes and notes and certificates 

of United States circulating as currency 185 

Jan. 28, 1865. Taxation of national-bank notes and notes and certificates 

of United States circulating as currency 185 

Mar. 3, 1865. Taxation of national-bank notes and notes and certificates 

of United States circulating as currency 185 

July 14, 1870. Taxation of national-bank notes and notes and certificates 

of United States circulating as currency 185 

Aug. 13, 1894. Taxation of national-bank notes and notes and certificates 

of United States circulating as currency 185 

July 17, 1862. Restriction on notes less than one dollar 185 

Feb. 21, 1857. Foreign coins not legal tender ISO 

July 17, 1861. Demand Treasury notes legal tender same as United States 

notes 187 

Feb. 12, 1862. Demand Treasury notes legal tender same as United States 

notes 186, 187 

Feb. 25, 1862. Demand Treasury notes legal tender same as United States 

notes 186, 187 

Feb. 25, 1862. United States notes legal tender except for duties on Im- 
ports and interest on public debt 187 

Mar. 17, 1862. Demand Treasury notes legal tender same as United States 

notes 187 



8 



DATES OF ACTS RELATING TO NATIONAL BANKS. 



Page. 
July 11, 1862. United States notes legal tender except for duties on im- 
ports and interest on public debt 186 

Jan. 17, 1863. United States notes legal tender except for duties on im- 
ports and interest on public debt 187 

Mar. 3, 1863. United States notes legal tender except for duties on im- 
ports and interest on public debt 187 

Mar. 3. 1863. Interest-bearing notes legal tender to same extent as United 

States notes 187 

June 30,1864. Interest-bearing notes legal tender to same extent as United 

States notes 187 

Feb. 12, 1S73. Gold coins of United States legal tender 186 

Feb. 12, 1873. Minor coins of United States legal tender to amount of 

twenty-five cents 186 

Feb. 28. 1878. Standard silver dollar legal tender 186 

Feb. 28, 1878. Silver certificates 199 

June 9, 1879. Subsidiary silver coins legal tender to amount not exceed- 
ing ten dollars 186 

Mar. 3. 1887. Silver certificates 199 

July 12. 1882. Gold certificates, for what receivable 187 

July 1. 1902. Philippine coinage 186 

Mar. 2, 1903. Philippine coinage 186 

Mar. 14, 1900. Currency act 195-201 

Mar. 4, 1907. Amending national-bank act 198. 201 

June 14, 1866. Government depositories 188,191 

June 8, 1872. Government depositories 188 

Mar. 3, 1873. Government depositories 188 

Feb. 27, 1877. Government depositories 188 

Feb. 3, 1879. Government depositories 191 

Mar. 2, 1907. Government depositories 188 

May 27, 1908. Government depositories 188 

Mar. 4, 1909. Misappropriating postal funds 189 

Mar. 4, 1909. Government depositories 191 

Feb. 2.5. 1863. Counterfeiting national-bank notes 192 

June 3, 1864. Counterfeiting national-bank notes 192 

June 30, 1864. Forging or counterfeiting United States securities 192 

June 30. 1864. Using plates to print without authority 192 

Feb. 5, 1867. Penalty for taking unauthorized impression of tools having 

such impression or dealing in counterfeit circulation 194 

Mar. 4, 1909. Counterfeiting national-bank notes 192, 193. 194 

June 30, 1876. Fraudulent notes to be so marked by United States officers 

and officers of national banks 195 

Aug. 5, 1909. Panama Canal bonds, issue of, authorized at 3 per cent 201 

Mar. 2, 1911. Panama Canal bonds under act of August 5, 1909, not avail- 
able as secui'ity for circulation 203 

JIar. 2, 1911. Issue of gold certificates on deposit of foreign coin or 

bullion 198 

Mar. 2, 1911. Certified checks drawn on national and State banks receiv- 
able for duties on imports and internal taxes 198, 203 

Mar. 3, 1911. Jurisdiction of United States district courts 181 

Mar. 3, 1913. Certified checks on national and State banks and trust 
companies receivable in payment for duties on imports, 

internal taxes, and all public dues 204 

June 12, 1916. Issue of gold certificates 198 

July 17, 1916. Government deposits in Federal land banks 190 

Apr. 24, 1917. Deposit of proceeds arising from sale of bonds. No reserve 

required to be held against United States deposits 190 

May 22, 1918. National banks authorized to subscribe to American Red 

Cross during the war 204 

Dec. 24,1919. Gold certificates made legal tender 187 

SPECIAT. ACTS RELATING TO NATIONAL BANKS. 

Apr. 12, 1900. National banking laws extended to Porto Rico 207 

Apr. 30. 1900. National hanking laws extended to Hawaii 207 

Feb. 26, 1913. Granting Fifth-Third National Bank of Cincinnati charter 

No. 20 208 

Fifty-seven acts changing the location or name, or both, of various na- 
tional banks 208-211 



BUREAU OF THE COMPTROLLER OF THE 

CURRENCY. 



THE .\ATIONAL-BAXK ACT AKP ACTS AMENDATORY THEREOF 
AiND SUPPLEME.NTARY THERETO. 



CHAPTER I. 



BUREAU OF THE COMPTROLLER OF THE CURRENCY. 



100. 324 



101. 
102. 



104. 

105. 
106. 



325, 
326 



103. 327 



107. 330 

108. 331, 



109. 332 



Bureau of the Comptroller of 

the Currency. 
Comptroller of the Currency. 
Qualification of Comptroller 

of the Currency. Amount 

of bond. 
Deputy Comptroller of the 

Currency. 
Additional Deputy Comptroller of 

the Currency. 
Clerks. 
Interest in national banks 

prohibited. 
Seal of Comptroller of the 

Currency. 
Rooms, vaults, and furniture 

for Currency Bureau. 
Banks other than national in 



328. 
329. 



District of Columbia. (See 
sec. 714, Code District of 
Columbia.) 

110. 333. Report of Comptroller. 

111. Act April 28, 1902. Report of 

Comptroller to give com- 
plete list of all employees 
of the office, information 
about failed banks, em- 
ployees under receivers, 
etc. 

112. Act January 12, 1895. Number of 

copies of report to be 
printed. 

113. Joint resolution March 4, 1907. 

Three thousand additional 
copies authorized to be 
printed. 



BUREAU OF THE COMPTROLLER OF THE CURRENCY. 

100. Sec. 324.— There shall be in the Department of the^ A^ct June s. 
Treasury a bureau charged with the execution of all la^YSsec. i ; is stat.' 
passed by Congress relating to the issue and regulation of ^-j^^f; ^^^ 03 
a national currency secured by United States bonds and,i9i3, sec. 'lo- 
under the general supervision of the Federal Reserve 200. 
Board, of all Federal reserve notes, the chief officer of 

wliich bureau shall be called the Comptroller of the Cur- 
rency and shall perform his duties under the general 
directions of the Secretary of the Treasury. 

COMPTROLLER OF THE CURRENCY. 

101. Sec. 325.— The Comptroller of the Currency shall ^g^^* ^c""%^' 
be ai^pointed by the President, on the recommendation of sec. i; I's stat." 
the Secretary of the Treasury, by and with the advice Act' Mar. .3, 
and consent of the Senate, and shall hold his office for the lfp:_, . ^g g\^^- 
term of five years unless sooner removed by the Presi- l.,'398. 
dent, upon reasons to be communicated by him to the 

Senate ; and he shall be entitled to a salary of five thou- 
sand dollars a 3'ear. 

Note. — Section 10 of the Federal reserve act provides that the 
Comptroller of the Currency shall be an ex ofiicio member of the 
Federal Reserve Board and sh;ill, in addition to his salary as 
Comptroller, receive the sum of $7,UUU annually lor his service on 
RUid board. 

U 



12 BUREAU OF THE COMPTROLLER OF THE CURRENCY. 

QUALIFICATION OF COMPTROLLER OF THE CURRENCY. 
AMOUNT OF BOND. 

Act June 3. 102. Scc. 326. — The Comptroller of the Currency shall, 
sec. i ; 13 Stat! withiii fifteen clays from the time of notice of his appoint- 
L., 99. ment, take and subscribe the oath of office ; and he shall 

give to the United States a bond in the penalty of one 
hundred thousand dollars, with not less than two respon- 
sible sureties, to be approved by the Secretary of the 
Treasury, conditioned for the faithful discharge of the 
duties of his office. 

DEPUTY COMPTROLLER OF THE CURRENCY. 

Act Jnne 3, 103. Sec. 327. — There shall be in the Bureau of the 
sec^^i ; 13 s\at.' Comptroller of the Currency a Deputy Comptroller of the 
^■> 99' Currency, to be appointed by the Secretary, who shall be 

entitled to a salary of two thousand five hundred dollars 
a year, and who shall possess the power and perform the 
duties attached by law to the office of Comptroller dur- 
ing a vacancy in the office or during the absence or ina- 
bility of the Comptroller. The Deputy Comptroller shall 
also take the oath of office prescribed by the Constitution 
and laws of the United States, and shall give a like bond 
in the penalty of fifty thousand dollars. 

NoTE.^The salary of the Deputy Comptroller has been fixed at 
various amounts by different appropriation bills, as follows: Act 
March 3, 1875 (sundry civil bill), 18 Stat. L., 398, $3,000; act 
March 3, 1901, 31 Stat. L., 978, $2,800; act March 18, 1904, 33 
Stat. L., 103, $3,000 ; act February 3, 1905, 33 Stat. L., 649, and all 
subsequent acts, $3,500. 

ADDITIONAL DEPUTY COMPTROLLER OF THE CURRENCY. 

1908* ^ay^^22, 104. Deputy Comptroller, $3,500; Deputy Comptroller, 
L., 203. $3,000, who shall be appointed by the Secretary of the 

1909,*^ 3^5^stat! i'l'^^sury, and shall possess the power and- perform the 
L., 867. duties attached by law to the office of Comptroller dur- 

ing a vacancy in the office of Comptroller and Deputy 
Comptroller or during the absence or inability of the 
Comptroller and the Deputy Comptroller, and said assist- 
ant Deputy Comptroller shall give a like bond in the pen- 
alty of fifty thousand dollars. 

Note. — The additional Deputy Comptroller was first provided 
for in the act of May 22, 1908. 

CLERKS. 

Act June 3, 105. Scc. 328. — The Comptroller of the Currency shall 
iec.^i ; ^13 s\at; employ, from time to time, the necessary clerks, to be 
L., 100. appointed and classified by the Secretary of the Treas- 

ury, to discharge such duties as the Comptroller shall 
direct. 



BUREAU OF THE COMPTROLLER OF THE CURRENCY. 13 

INTEREST IN NATIONAL BANKS PROHIBITED. 

106. Sec. 329.— It shall not be lawful for the Comptrol- ^^Act Janets, 
ler or the Deputy Comptroller of the Currency, either sec. 1 ; i3 stat! 
directly or indirectly, to be interested in any association ^' ^^^' 
issuing national currency under the laws of the United 

States. 

Note. — Section 10 of the Federal reserve act provides In part 
that no member of the Federal Reserve Board shall be an officer 
or director of any bank, banking institution, trust company, or 
Federal reserve bank, nor hold stock in any bank, banking institu- 
tion, or trust company. As the Comptroller of the Currency is a 
member of the board, he is thus prohibited from being connected 
as an officer or shareholder with any bank, banking institution, 
or trust company, whether State or national. It would appear 
that under section 329 a Deputy Comptroller of the Currency 
would be prohibited from being interested not only in any national 
bank but in any State bank that should become a member bank 
and a shareholder in one of the Federal reserve banks. 

SEAL OF COMPTROLLER OF THE CURRENCY. 

107. Sec. 330 [as amended 1875]. — The seal devised by^^Aa J"np 3, 
the Comptroller of the Currency for his office, and ap- sec. ^ ; 13 stat! 
proved by the Secretary of the Treasury, shall continue to ^"Act.'^Feb. is, 
be the seal of office of the Comptroller, and may be re- isjs. £• ^o\ is 
newed when necessary. A description of the seal, with ^ • •• 

an impression thereof, and a certificate of approval by the 
Secretary of the Treasury, shall be filed in the office of 
the Secretary of State. 

ROOMS, YAULTS, AND FURNITURE FOR CURRENCY 
BUREAU. 

108. Sec. 331. — There shall be assigned, from time to Act June 3, 
time, to the Comptroller of the Currency, by the Secretary gee. 3 ; 13 stat. 
of the Treasury, suitable rooms in the Treasury building ^'' ^^o. 

for conducting the business of the Currency Bureau, con- 
taining safe and secure fireproof vaults, in which the 
Comptroller shall deposit and safely keep all the plates 
not necessarily in the possession of engravers or printers, 
and other valuable things belonging to his department; 
and the Comptroller shall from time to time furnish the 
necessary furniture, stationery, fuel, lights, and other 
proper conveniences for the transaction of the business of 
his office. 

109. Sec. 332.— 

Refers entirely to banks other than national in the District of 
Columbia and is Incorporated In section 714 of the Code of the 
District of Columbia and has been repeatedly amended. 

REPORT OF COMPTROLLER. 

110. Sec. 333 [as amended 1875].— The Comptroller of 
the Currency shall make an annual report to Congress, at 
the commencement of its session, exhibiting — 

First. A summary of the state and condition of every Act .Tnno 3, 

*■ 1 ft ft .1 e d^ ft 1 • 

association from which reports have been received the 13 'stat.' l.! 
preceding year, at the several dates to which sucli reports ^i"^- 



14 BL'REAU OF THE COMPTROLLEE OF THE CUEEENC"?. 

ic--*' Ffi*" ^^: refer, with an abstract of the whole amount of bankihs: 

lo( o, sec. i; . ' ^ 111 PI 11 !• T • 

17 Stat. L., capital returned b}' them, or the whole amount oi their 
^^Act. Feb. IS, debts and liabilities, the amount of circulating notes out- 
stat ' L ^siV^^ standing, and the total amount of means and resources, 
specifying the amount of lawful money held by them at 
the times of their several returns, and such other informa- 
tion in relation to such associations as, in his judgment, 
may be useful. 

Second. A statement of the associations whose business 
has been closed during the year, with the amount of their 
circulation redeemed and the amount outstanding. 

Third. Any amendment to the laws relative to banking 
by which the system may be improved, and the security 
of the holders of its notes and other creditors may be 
increased. 

Fourth. A statement exhibiting under appropriate 
heads the resources and liabilities and condition of the 
banks, banking companies, and savings banks organized 
under the laws of the several States and Territories ; such 
information to be obtained by the Comptroller from the 
reports made by such banks, banking companies, and 
savings banks to the legislatures or officers of the different 
States and Territories, and, where such reports can not 
be obtained, the deficiency to be supplied from such other 
authentic sources as may be available. 

Fifth. The names and compensation of the clerk's em- 
ployed by him. and the whole amount of the expenses of 
the banking department during the j^ear. 

COMPTROLLER TO GIYE COMPLETE LIST OF ALL EM- 
PLOYEES OF THE OFFICE. INFORMATION ABOUT 
FAILED BANKS, EMPLOYEES, UNDER RECEIYERS, 
ETC. ACT APRIL 28, 1902. 

Act April 28, HI. Provided, That for the fiscal year of nineteen him- 
tiye''executtvlidred and two and thereafter, a full and complete list of 
p°^o^p1-^fa tkfn ^^1 officers, agents, clerks, and other employees of the 
act; 32 Stat. office of the Comptroller of the Currency, including bank 
examiners, receivers and attorneys for receivers, and 
clerks employed by such examiners and receivers, or any 
other person connected with the work of said office in 
Washington or elsewhere, whose salary or compensation 
is paid from the Treasury of the United States or as- 
sessed against or collected from existing or failed banks 
under their supervision or control, shall be transmitted to 
the Secretary of the Interior in accordance with the pro- 
visions of an Act of Congress approved January twelfth, 
eighteen hundred and eighty-five, relating to the Official 
Eegister : And provided further, That the Comptroller of 
the Currency is hereby directed to include in his annual 
report to the Speaker of the House of Representatives, 
expenses incurred during each year, in liquidation of each 
failed national bank separately. 



BUREAU OF THE COMPTROLLER OF THE CURRENCY. 15 

NUMBER OF COPIES OF REPORT TO BE PRINTED. ACT 
OF JANUARY 12, 1895. 

112. Sec. 73. — This section provides in part that there ^^^ct -Ta^n ..ij-'. 
shall be printed "Of the annual report of the Comp-28 stiat'. L.',6i6! 
troller of the Currency, ten thousand copies; one thou- 
sand for the Senate, two thousand for the House, and 

seven thousand for distribution by the Comptroller of 
the Currency." 

THREE THOUSAND ADDITIONAL COPIES AUTHORIZED TO 
BE PRINTED. PUBLIC RESOLUTION NO. 25, MARCH 4, 

1907. 

113. That section 73 of an act " Providing for the pub- uf^^^^oi'; 
lie printing and binding, and the distribution of public 34 stiit. l.) 
documents," approved January 12, 1895, be, and the same 

is hereby, so amended as to authorize the printing annu- 
ally hereafter of ten thousand copies of the annual report 
of the Comptroller of the Currency, for distribution by 
the Comptroller of the Currency, instead of seven thou- 
sand copies as heretofore. 



16 BUREAU or THE COMPTROLLEK OF THE CUREENCy. 



ORGANIZATION AND POWERS. 



164312°— 20 2 17 



CHAPTER 11. 



ORGANIZATION AND POWERS. 



200. Act June 20, 1874. The national- 
bank act. 

SOI. 5133. Formation of national 
banking associations. 

202. 5134. Requisites of organization 

certificate. 

203. 5135. How certificate shall be ac- 

knowledged and filed. 

204. 5136. Corporate powers of asso- 

ciations. 

205. Acts December 23, 1913, and Sep- 

tember 7, 1916. Loans 
on improved real estate. 

206. Act December 23, 1913, as amend- 

ed. When national bank 
as a member of Federal 
reserve system may ac- 
cept drafts or bills of ex- 
change. 

207. Act September 7, 1916. Accept- 

ance of drafts or bills of 
exchange drawn upon na- 
tional banks by banks or 
bankers in foreign coun- 
tries or dependencies of 
the United States. 

208. Act December 23, 1913, as amend- 

ed. Trust company pow- 
ers of national banks. 

209. Act September 7, 1916. Power of 

national bank to act as 
Insurance agent or as 
broker or agent in making 
or procuring loans on real 
estate. 

210. Act December 23, 1913, as amend- 

ed. Foreign branches. 

211. Act May 1. 1886. Change of 

name and location. 

212. Act May 1, 1886. Debts not af- 

fected by change. 

213. Act May 1, 1886. No release 

from liabilities. 

214. Act August 13, 1888. National 

banks deemed citizens of 
State in which located. 

215. Act July 12, 1882. Extension of 

corporate existence. 

216. Act July 12, 1882. Consent of 

two-thirds necessary. 

217. Act July 12, 1882. Special ex- 

amination of bank and 
issue of certificate of ap- 
proval by Comptroller. 

218. Act July 12, 1882. Status not 

changed by extension. 
Jurisdiction of suits by 
or against national banks. 

219. Act July 12, 1882. Dissenting 

shareholders may with- 
draw. 

220. Act July 12, 1882. Redemption 

of circulating notes is- 
sued prior to extension. 



221. Act July 12, 1882. Dissolution 

of banks not extending 
period of succession. 

222. Act April 12, 1902. Reextension 

of corporate existence. 

223. 5137. Power to hold real prop- 

erty. 

224. 51.38. Requisite amount of capital. 

225. 5139. Shares of stock and trans- 

fers. 

226. 5140. How payment of capital 

stock must be made and 
certified. 

227. 5141. Proceedings if shareholder 

fails to pay installments. 

228. 5142. National banks may in- 

crease capital stock. 

229. Act May 1, 1886. Increase of 

capital stock. 

230. 5143. Reduction of capital stock. 

231. 5144. Right of shareholders to 

vote. Proxies author- 
ized. 

232. 5145. Election of directors. 

233. 5146. Requisite qualification of 

directors. 

234. Acts of October 15, 1914, and May 

15,_ 1916. Interlocking di- 
rectorates—when forbid- 
den. 

235. Act October 15, 1914. Enforce- 

ment of act in reference 
to interlocking director- 
ates. 

236. 5147. Oath required from direc- 

tors. 

237. 5148. Filling vacancies. 

238. 5149. Proceedings where no elec- 

tion is held on the proper 
day. 

239. 5150. Election of president of the 

board. 

240. 5151. Individual liability of share- 

holders. 

241. Act December 23, 1913. Indi- 

vidual liability of share- 
holders. Liability of 
shareholders who have 
transferred their shares. 

242. 5152. Executors, trustees, etc., 

not personally liable. 

243. 5153. National banking associa- 

tions to be depositaries 
of public moneys. 

244. Act December 23, 1913. Govern- 

ment deposits in Federal 
reserve banks. 

245. 5154. Conversion of State banks 

into national baiiking as- 
sociations. 

246. 5155. State banks having 

branches. 

247. 5156. Reservation of rights of 

assix-iations organized 
under act of 1863. 
19 



20 OEGAXIZATION AND PO^'ERS. 

THE NATIONAL BANK ACT. ACT JUNE 20, 1874. 

Act June 20, 200. Sec. 1. — An act entitled "An act to provide a na- 
sec 1" ; 18 Stat! tional cuiTencv secured by a pledge of United States 
L., 123. bonds, and to provide for the circulation and redemption 

thereof," approved June 3, 1864, shall hereafter be known 

as " the national-bank act." 

FORMATION OF NATIONAL BANKING ASSOCIATIONS. 

Act Jnne 3, 201. Scc. 5133. — Associatious for carrying on the busi- 
sfc^^s : 13 Stat; ness of banking under this Title may be formed by any 
L., 100. number of natural persons, not less in any case than five. 

They shall enter into articles of association, vrhich shall 
specify in general terms the object for which the associa- 
tion is formed, and may contain any other provisions, 
not inconsistent with law. which the association may see 
fit to adopt for the regulation of its business and the con- 
duct of its affairs. These articles shall be signed by the 
persons uniting to form the association, and a copy of 
them shall be forwarded to the Comptroller of the Cur- 
rency, to be filed and preserved in his office. 

KEQUISITES OF OEGANIZATION CERTIFICATE. 

1864* c"°^i06' ^^^' ^®^- ^^^^- — '^^^ persons uniting to form such an 
sec. 6 ; 13 Stat! association shall, under their hands, make an organiza- 
^' ^^^' tion certificate, which shall specifically state : 

First. The name assumed bv such association: which 
name shall be subject to the approval of the Comptroller 
of the Currencv. 

Second. The place where its operations of discount and 
deposit are to be carried on. designating the State, Terri- 
tory, or district, and the particular county and city, town, 
or village. 

Third. The amount of capital stock and the number of 
shares into which the same is to be divided. 

Fourth. The names and places of residence of the 
shareholders and the number of shares held by each of 
them. 

Fifth. The fact that the certificate is made to enable 
such persons to avail themselves of the advantages of 
this Title. 

Note. — For authority to change names or locations see act May 
1, 18S6, post, paragraph 211. 

HOW CERTIFICATES SHALL BE ACKNOWLEDGED AND 
FILED. 

1864* c°°%6' ^^^' ^^^' ^^^^- — "^h® organization certificate shall be 
Bee. 6 ; 13 Stat! acknowledged before a judge of some court of record, or 
L., 101. notary public; and shall be, together with the acknowl- 

edgment thereof, authenticated by the seal of «uch court, 
or notary, transmitted to the Comptroller of the Cur- 
rency, who shall record and carefully preserve the same 
in his office. 



ORGANIZATION AND POWERS. 21 

CORPORATE POWERS OF ASSOCIATION. 

204. Sec. 5136. — Upon duly making and filing articfes Act June s. 
of association and an organization certificate, the asso- sec^^s : is stat! 
elation shall become, as from the date of the execution'"-' ^^i- 

of its organization certificate, a body corporate, and as 
such, and in the name designated in the organization 
certificate, it shall have power — 

First. To adoj)t and use a corporate seal. 

Second. To have succession for the period of twenty 
years from its organization, unless it is sooner dissolved 
according to the provisions of its articles or association, 
or by the act of its shareholders owning two-thirds of its 
stock, or unless its franchise becomes forfeited by some 
violation of law. 

Third. To make contracts. 

Fourth. To sue and be sued, complain and defend, in 
any court of law and equity, -as fully as natural persons. 

Fifth. To elect or appoint directors, and by its board 
of directors to appoint a president, vice president, cashier, 
and other officers, define their duties, require bonds of 
them and fix the penalty thereof, dismiss such officers or 
any of them at pleasure, and appoint others to fill their 
places. 

Sixth. To prescribe, by its board of directors, by-laws 
not inconsistent with law, regulating the manner in 
which its stock shall be transferred, its directors elected 
or appointed, its officers appointed, its property trans- 
ferred, its general business conducted, and the privileges 
granted to it by law exercised and enjoyed. 

Seventh. To exercise by its board of directors, or duly 
authorized officers or agents, subject to law, all such inci- 
dental powers as shall be necessary to carry on the busi- 
ness of banking; by discounting and negotiating promis- 
sory notes, drafts, bills of exchange, and other evidences 
of debt; by receiving deposits; by buying and selling 
exchange, coin, and bullion; by loaning money on per- 
sonal security ; and by obtaining, issuing, and circulating 
notes according to the provisions of this Title. 

But no association shall transact any business except 
such as is incidental and necessarily preliminary to its 
organization, until it has been authorized by the Comp- 
troller of the Currency to commence the business of 
banking. 

Note. — See sections 5169 and 5170, paragraphs 320 and 321, post, 
relating to issuing and publishing of certificate authorizing asso- 
ciation to begin Ijusiness. 

LOANS ON IMPROVED REAL ESTATE. 

205. Sec. 24. — Any national banking association not jj^^g^* ^^<=- ^f'. 
situated in a central reserve city may make loans secured 3S 'stat.' "l.'. 
by improved and unencumbered farm land situated "'Act. Sept. 7, 
within its Federal reserve district or within a radius of J^*'!:^^'^^ ^*^'- 



22 ORGANIZATION AND POWERS. 

one hundred miles of the place in which such bank is 
located, irrespective of district lines, and may also make 
loans secured by improved and unencumbered real 
estate located within one hundred miles of the place in 
which such bank is located, irrespective of district lines ; 
but no loan made upon the security of such farm land 
shall be made for a longer time than five years, and no 
loan made upon the security of such real estate as dis- 
tinguished from farm land shall be made for a longer 
time than one year nor shall the amount of any such loan, 
whether upon such farm land or upon such real estate, 
exceed fifty per centum of the actual value of the prop- 
erty offered as security. Any such bank may make 
such loans, whether secured bj" such farm land or such 
real estate, in an aggi'egate sum equal to twenty-five 
per centum of its capital and surplus or to one-third of 
its time deposits and such banks may continue hereafter 
as heretofore to receive time deposits and to pay interest 
on the same. 

The Federal Reserve Board shall have power from time 
to time to add to the list of cities in which national banks 
shall not be permitted to make loans secured upon real 
estate in the manner described in this section. 

WHEN NATIONAL BANK AS A MEMBER BANK OF FED- 
ERAL RESERVE SYSTEM MAY ACCEPT DRAFTS OR 
BILLS OF EXCHANGE. 

Act Dec. 23, 206. Any member bank may accept drafts or bills of 
38 "'stir L.,' exchange drawn upon it having not more than six 
^^i'et Mar 3 months' sight to run, exclusive of days of grace, which 
1915 ; 38 Stat! grow out of transactions involving the importation or 
Act Sept. 7, exportation of goods ; or which grow out of transactions 
1^^762^^ ^*^*" involving the domestic shipment of goods, provided ship- 
Act June 21, ping documents conveying or securing title are attached 
' ^^^* * at tlie time of acceptance ; or which are secured at the 
time of acceptance by a warehouse receipt or other such 
document conveying or securing title covering readily 
marketable staples. No member bank shall accept, 
whether in a foreign or domestic transaction, for any 
one person, company, firm, or corporation to an amount 
equal at any time in the aggregate to more than ten per 
centum of its paid-up and unimpaired capital stock and 
surplus, unless the bank is secured either by attached 
documents or by some other actual security growing out 
of the same transaction as the acceptance; and no Ijank 
shall accept such bills to an amount equal at any time in 
the aggregate to more than one-half of its paid-up and 
unimpaired capital stock and surplus: Provided^ how- 
ever^ That the Federal Reserve Board, under such gen- 
eral regulations as it may prescribe, which shall apply 
to all banks alike regardless of the amount of capital 
stock and surplus, may authorize any member bank to 
accept such bills to an amount not exceeding at any time 



ORGANIZATION AND POWERS. 23 

ill the aggregate one hundred per centum of its paid-up 
and unimpaired capital stock and surplus: Provided^ fur- 
thei\ That the aggregate of acceptances growing out of 
domestic transactions shall in no event exceed fifty per 
centum of such capital stock and surplus. 

207. Acceptance of drafts or bills of exchange drawn upon ^^Act s^ept j, 
national banks by banks or bankers in foreign countries or l., 'amending 
dependencies of the United States. I^e'a. \lL ^^• 

Any member bank may accept drafts or bills of ex- 
change drawn upon it having not more than three months' 
sight to run, exclusive of days of grace, drawn under 
regulations to be prescribed by the Federal Reserve 
Board by banks or bankers in foreign countries or de- 
pendencies or insular possessions of the United States for 
the purpose of furnishing dollar exchange as required by 
the usages of trade in the respective countries, dependen- 
cies, or insular possessions. Such drafts or bills may be 
acquired by Federal reserve banks in such amounts and 
subject to such regulations, restrictions, and limitations 
as may be prescribed by the Federal Reserve Board: 
Provided, however, That no member bank shall accept 
such drafts or bills of exchange referred to in this para- 
graph for any one bank to an amount exceeding in the 
aggregate ten per centum of the paid-up and unimpaired 
capital and surplus of the accepting bank unless the draft 
or bill of exchange is accompanied by documents convey- 
ing or securing title or by some other adequate security : 
Provided further, That no member bank shall accept such 
drafts or bills in an amount exceeding at any time the 
aggregate of one-half of its paid-up and unimpaired 
capital and surplus. 

TRUST COMPANY POWERS OF NATIONAL BANKS. 

208. The Federal Reserve Board is authorized by sec- ■^^^l^c':\iX\ 
tion 11, paragraph k,of the Federal reserve act "to grant 38St'at.L.,28i: 
by special permit to national banks applying therefor, 

•when not in contravention of State or local law, the right 
to act as trustee, executor, administrator, registrar of 
stocks and bonds, guardian of estates, assignee, receiver, 
committee of estates of lunatics, or in any other fiduciary 
capacity in which State banks, trust companies, or other 
corporations which come into competition with national 
banks are permitted to act under the laws of the State 
in which the national bank is located. 

" Whenever the laws of such State authorize or permit 
the exercise of any or all of the foregoing powers by 
State banks, trust companies, or other corporations which 
compete with national banks, the granting to and the 
exercise of such powers by national banks shall not be 
deemed to be in contravention of State or local law 
within the meaning of this act. 

" National banks exercising anj' or all of the powers 
enumerated in this subsection shall segregate all assets 
held in any fiduciary capacity from the general assets of 



24 ORGANIZATION AND POWERS. 

the bank and shall keep a separate set of books and 
records showing in proper detail all transactions en- 
gaged in under authority of this subsection. Such books 
and records shall be open to inspection by the State 
authorities to the same extent as the books and records 
of corporations organized under State law which exer- 
cise fiduciary powers, but nothing in this act shall be 
construed as authorizing the State authorities to ex- 
amine the books, records, and assets of the national bank 
which are not held in trust under authority of this sub- 
section. 
1918* ^^^** ^^' " ^° national bank shall receive in its trust depart- 
ment deposits of current funds subject to check or the 
deposit of checks, drafts, bills of exchange, or other items 
for collection or exchange purposes. Funds deposited or 
held in trust by the bank awaiting investment shall be 
carried in a separate account and shall not be used by the 
bank in the conduct of its business unless it shall first 
set aside in the trust department United States bonds or 
other securities approved by the Federal Reserve Board. 

" In the event of the failure of such bank the owners 
of the funds held in trust for investment sliall have a 
lien on the bonds or other securities so set apart in addi- 
tion to their claim against the estate of the bank. 

"Whenever the laws of a State require corporations 
acting in a fiduciary capacity to deposit securities with 
the State authorities for the protection of private or 
court trusts, national banks so acting shall be required 
to make similar deposits and securities so deposited shall 
be held for the protection of private or court trusts, as 
provided by the State law. 

" National banks in such cases shall not be required to 
execute the bond usually required of individuals if State 
corporations under similar circumstances are exempt 
from this requirement. 

"National banks shall have power to execute such 
bond when so required by the laws of the State. 

"In any case in which the laws of a State require that 
a corporation acting as trustee, executor, administrator, 
or in any capacity sjDecified in this section, shall take an 
oath or make an affidavit, the president, vice president, 
cashier, or trust officer of such national bank may take 
the necessary oath or execute the necessary affidavit. 

_ " It shall be unlawful for any nationaf banking asso- 
ciation to lend any officer, director, or employee any 
funds held in trust under the powers conferred by this 
section. Any officer, director, or employee making such 
loan, or to whom such loan is made, may be finec\ not 
more than $5,000, or imprisoned not more than five 
years, or may be both fined and imprisoned, in the dis- 
cretion of the court. 

_ " In passing upon applications for permission to exer- 
cise the powers enumerated in this subsection, the Fed- 
eral Reserve Board may take into consideration the 



ORGANIZATION AND POWERS. 25 

amount of capital and surplus of the applyino; bank, 
•whether or not such capital and surplus is sufficient under 
the circumstances of tlie case, the needs of the community 
to be served, and any other facts and circumstances that 
seem to it proper, and may grant or refuse the applica- 
tion accordingly: Provided^ That no permit shall be 
issued to any national banking association having a capi- 
tal and surplus less than the capital and surplus required 
by State law of State banks, trust companies, and cor- 
porations exercising such powers." 

209. Power of national tank to act as insurance agent or ^^^ g^pt 7 
as broker or agent in making or procuring loans on real i^i^ 39 stat.' 

° o X- o L (o2, amend- 

estate. ing sec. 13 of 

That in addition to the powers now vested by law in ^^^- ^^^- '*^^*- 
national banking associations organized under the laws 
of the United States any such association located and 
doing business in any place the population of which does 
not exceed five thousand inhabitants, as shown by the 
last preceding decennial census, may, under such rules 
and regulations as may be prescribed by the Comptroller 
of the Currency, act as the agent for any fire, life, or 
other insurance company authorized by the authorities 
of the State in which said bank is located to do business 
in said State, by soliciting and selling insurance and col- 
lecting premiums on policies issued by such company; 
and may receive for services so rendered such fees or 
commissions as may be agreed upon between the said 
association and the insurance company for which it may 
act as agent; and may also act as the broker or agent 
for others in making or procuring loans on real estate 
located within one hundred miles of the place in which 
said bank may be located, receiving for such services a 
reasonable fee or commission: Provided^ however^ That 
no such bank shall in any case guarantee either the prin- 
cipal or interest of any such loans or assume or guarantee 
the payment of any premium on insurance policies issued 
through its agency by its principal: And frovided 
further, That the bank shall not guarantee the truth of 
any statement made by au assured in filing his applica- 
tion for insurance. 

FOREIGN BRANCHES [as amended 1919]. 

210. Sec. 25. — Any national banking association pos- ^^t Dec. ^23, 
sessing a capital and surplus of $1,000,000 or more may 38 'sfat "l.| 
file application with the Federal Reserve Board for per^ '"^xct Sept. 7, 
mission to exercise, upon such conditions and under such Jf^^U*^ ^^^• 
regulations as may be prescribed by the said board, either Act Sept. 17, 
or both of the following powers: ^^'^- 

First. To establish branches in foreign countries or 
dependencies or insular possessions of the United States 
for the furtherance of the foreign commerce of the United 
States, and to act if required to do so as fiscal agents of 
the United States. 



26 ORGANIZATION AND POWERS. 

Second. To invest an amount not exceeding in the 
aggregate ten per centum of its paid-in capital stock and 
surplus in the stock of one or more banks or corporations 
chartered or incorporated under the laws of the United 
States or of any State thereof, and principally engaged 
in international or foreign banking, or banking in a de- 
pendency or insular possession of the United States either 
directly or through the agency, ownership, or control of 
local institutions in foreign countries, or in such depend- 
encies or insular possessions. Until January 1, 1921, any 
national banking association, without regard to the 
amount of its capital and surplus, may file application 
with the Federal Reserve Board for permission, upon 
such conditions and under such regulations as may be pre- 
scribed by said board, to invest an amount not exceeding 
in the aggregate 5 per centum of its paid-in capital and sur- 
plus in the stock of one or more corporations chartered or 
incorporated under the laws of the United States or of 
any State thereof and, regardless of its location, princi- 
pally engaged in such phases of international or foreign 
financial operations as may be necessary to facilitate the 
export of goods, wares, or merchandise from the United 
States or any of its dependencies or insular possessions 
to any foreign country: Provided^ however^ That in no 
event shall the total investments authorized by this sec- 
tion by any one national bank exceed 10 per centum of its 
capital and surplus. 

Such application shall specify the name and capital of 
the banking association filing it, the powers applied for, 
and the place or places where the banking or financial 
operations proposed are to be carried on. The Federal 
Reserve Board shall have power to approve or to reject 
such application in whole or in part if for any reason the 
granting of such application is deemed inexpedient, and 
shall also have power from time to time to increase or 
decrease the number of places where such banking opera- 
tions may be carried on. 

Every national banking association operating foreign 
branches shall be required to furnish information con- 
cerning the condition of such branches to the Comptroller 
of the Currency upon demand, and every member bank 
investing in the capital stock of banks Or corporations 
described above shall be required to furnish information 
concerning the condition of such banks or corporations 
to the Federal Reserve Board upon demand, and the Fed- 
eral Reserve Board may order special examinations of 
the said branches, banks, or corporations at such time or 
times as it may deem best. 

Before any national bank shall be permitted to pur- 
chase stock in any such corporation the said corporation 
shall enter into an agreement or undertaking with the 
Federal Reserve Board to restrict its operations or con- 
duct its business in such manner or under such limita- 



ORGANIZATION AND POWERS. 27 

tions and restrictions as the said board may prescribe for 
the phico or places Avherein such business is to be con- 
ducted. If at anj^ time the Federal Reserve Board shall 
ascertain that the regulations prescribed by it are not 
being complied with, said board is hereby authorized and 
empowered to institute an investigation of the matter and 
to send for persons and papers, subpoena witnesses, and 
administer oaths in order to satisfy itself as to the actual 
nature of the transactions referred to. Should such in- 
vestigation result in establishing the failure of the cor- 
poration in question, or of the national bank or banks 
which may be stockholders therein, to comply with the 
regulations laid down by the said Federal Reserve Board, 
such national banks may be required to dispose of stock 
holdings in the said corporation upon reasonable notice. 

Every such national banking association shall conduct 
the accounts of each foreign branch inde|3endently of the 
accounts of other foreign branches established by it and 
of its home office, and shall at the end of each fiscal 
period transfer to its general ledger the profit or loss 
accrued at each branch as a separate item. 

Any director or other officer, agent, or employee of 
any member bank may, with the approval of the Federal 
Reserve Board, be a director or other officer, agent, or 
employee of any such bank or corporation above men- 
tioned in the capital stock of which such member bank 
shall have invested as hereinbefore provided, without 
being subject to the provisions of section eight of the Act 
approved October fifteenth, nineteen hundred and four- 
teen, entitled "An Act to supplement existing laws 
against unlawful restraints and monopolies, and for 
other purposes." 

CHANGE OF NAME AND LOCATION OF BANK. ACT MAT 

1, 1886. 

211. Sec. 2. — That any national banking association may ^ct May^ i, 
change its name or the place where its operations of dis- sec. 2 ; 24 stat! 
count and deposit are to be carried on, to any other place ^' ^^' 
within the same State, not more than thirty miles dis- 
tant, with the approval of the Comptroller of the Cur- 
rency, by the vote of shareholders owning two-thirds of 

the stock of such association. A duly authenticated 
notice of the vote and of the new name or location se- 
lected shall be sent to the office of the Comptroller of the 
Currency; but no change of name or location shall be 
valid until the Comptroller shall have issued his certifi- 
cate of approval of the same. 

DEBTS NOT AFFECTED BY CHANGE. ACT MAY 1, 1886. 

212. Sec. 3.— That all debts, liabilities, rights, provi- Act May 1. 

T ~ ,1 '. . . 1 -V 1 1 1880, c. (3, sec. 

sions, and powers of the association under its old name .-^ ; 24 stat. l., 
shall devolve upon and inure to the association under ^^' 
its new name. 



28 ORGAXIZATION AND POWERS. 

NO RELEASE FROM LIABILITIES. ACT MAT ], 1886. 

Act May 1, 213. Sec. 4. — That nothing in this act contained shall be 
41^24 *^stat ^if' ^^ construed as in any manner to release any national 
19. ' banking association under its old name or at its old loca- 

tion from any liability, or afiect any action or proceeding 
in law in which said association may be or become a 
part}^ or interested. 

XoTE.- — Section 1 of this act relates to increase of capital stock 
and is inserted after Section 5142, United States Revised Statutes. 

NATIONAL BANKS DEEMED CITIZENS OF STATES IN 
WHICH LOCATED. ACT AUGUST 13, 1888. 

188-*' ^^'Y'- 'M ^^^" ^^^' ^" — That all national banking associations es- 
stat.' L., 554." tablislicd under the laws of the United States shall, for 
1888* *c"°'866; the purposes of all actions by or against them, real, per- 
^^'c. 4 : 25 Stat, sonal, or mixed, and all suits in equity, be deemed citizens 
of the States in which they are respectively located; and 
in such cases the circuit and district courts shall not have 
jurisdiction other than such as they would have in cases 
between individual citizens of the same State. The pro- 
visions of this section shall not be held to affect the 
jurisdiction of the courts of the United States in cases 
commenced by the United States or by direction of any 
officer thereof, or cases for winding up the affairs of any 
such bank. 

Note.— See act March 3, 1911, section 24, 36 Stat. L., 1092, para- 
graph 701, post, as to jurisdiction of United States courts in 
national banking cases. 

EXTENSION OF CORPORATE EXISTENCE. ACT JULY 12, 

1882. 

Act July 12. 215. Sec. 1. — That any national banldng association 
Bec."i ; 22 s"tat! Organized under the acts of February twenty-fifth, eight- 
L., 162. ggj-^ liundred and sixty-three, June third, eighteen hun- 

dred and sixty-four, and February fourteenth, eighteen 
hundred and eighty, or under sections fifty-one hundred 
and thirty-three, fifty-one hundred and thirty-four, fifty- 
one hundred and thirty-five, fifty-one hundred and 
thirty-six, and fift^'-one hundred and fifty-four of the 
Revised Statutes of the United States, may, at any time 
within the two years next previous to the date of the ex- 
piration of its corporate existence under present law. and 
with the approval of the Comptroller of the Currency, to 
be granted, as hereinafter provided, extend its period of 
succession by amending its articles of association for a 
term of not more than twenty years from the expiration 
of the period of succession named in said articles of asso- 
ciation, and shall have succession for such extended 
period, unless sooner dissolved by the act of shareholders 
owning two-thirds of its stock, or unless its franchise 
becomes forfeited by some violation of law, or unless 
hereafter modified or repealed. 

Note. — Act of February 14. 1880, relates to the conversion of 
gold banlcs into currency banks, and is inserted after Revised 
Statutes 5186. 



ORGAXIZATION AND PO^VERS. 29 

CONSENT OF TWO-THIRDS NECESSARY. ACT JULY 12, 

1882. 

216. Sec. 2. — That such amendment of said articles of jg^^^^ ''c"'^ i-io' 
association shall be authorized by the consent in writing sec. 2 ; 22 s'lat! 

T 1 fl2 

of shareholders owning not less than two-thirds of the " 
capital stock of the association; and the board of direc- 
tors shall cause such consent to be certified under the seal 
of the association, by its president or cashier, to the 
Comptroller of the Currency, accompanied by an appli- 
cation made by the president or cashier for the approval 
of the amended articles of association hj the Comp- 
troller; and such amended articles of association shall 
not be valid until the Comptroller shall give to such asso- 
ciation a certificate under his hand and seal that the 
association has complied with all the provisions required 
to be complied witli, and is authorized to have succession 
for the extended period named in the amended articles of 
association. 

SPECIAL EXAMINATION OF BANK AND ISSUE OF CER- 
TIFICATE OF APPROVAL BY COMPTROLLER. ACT 
JULY 12, 1882. 

217. Sec. 3. — That upon the receipt of. the application ^^^ct J^i^iy.,i2, 
and certificate of the association provided for in the pre- sec.~;;; 22 s'tat.' 
ceding section, the Comptroller of the Currency shall ^■' ^^^• 
cause a special examination to be made, at the expense of 

the association, to determine its condition; and if after 
such examination or otherwise it appears to him that 
said association is in a satisfactory condition, he shall 
grant his certificate of approval provided for in the pre- 
ceding section, or if it appears that the condition of said 
association is not satisfactory, he shall withhold such 
certificate of ajDproval. 

STATUS NOT CHANGED BY EXTENSION. JURISDICTION 
OF SUITS BY OR AGAINST NATIONAL BANKS. ACT 
JULY 12, 1882. 

218. Sec. 4. — That any association so extending the ^^^.f 'c^'^soo' 
pei'iod of its succession shall continue to enjoy all thesec. 4 : 22 stat! 
rights and privileges and immunities granted and shall " ^ " 
continue to be subject to all the duties, liabilities, and re- 
strictions imposed by the Revised Statutes of the United 

States and other acts having reference to national bank- 
ing associations, and it shall continue to be in all respects 
the identical association it was before the extension of its 
period of succession : Provided, however^ That the juris- 
diction for suits hereafter brought by or against any as- 
sociation established under any law providing for na- 
tional banking associations, except suits between them 
and the United States, or its officers and agents, shall be 
the same as, and not other than, the jurisdiction for suits 
by or against banks not organized under any law of the 
United States which do or might do banking business 
where such national banking associations may be doing 
business when such suits may be begun: And all laws 



30 OKGANIZATION AND POWERS. 

and parts of laws of the United States inconsistent with 
this proviso be, and the same are hereby, repealed. 

Note. — See also act of August 13, 1888, relating to citizenship of 
national banks and jurisdiction of the circuit and district courts, 
paragraph 214, ante, and act of Mar. 3, 1911, sec. 24, 36 Stat. L., 
1092, paragraph 701, post, as to jurisdiction of United States 
courts In national banking cases. 

DISSENTING SHAREHOLDERS MAY WITHDRAW. ACT 
JULY 12, 1882. 

188^* 'l"^'^29o' ^^^' ^^^' ^" — That when any national banking associa- 
Bec."5 ; 22 Stat! tion has amended its articles of association as provided 
L., 163. jjj ^j^jg ^^^^ j^j-^^ ^YiQ Comptroller has granted his certificate 

of approval, any shareholder not assenting to such 
amendment may give notice in writing to the directors, 
within thirty days from the date of the certificate of ap- 
proval, of his desire to withdraw from said association, 
in which case he shall be entitled to receive from said 
banking association the value of the shares so held by 
him, to be ascertained by an appraisal made by a com- 
mittee of three persons, one to be selected by such share- 
holder, one by the directors, and the third by the first 
two ; and in case the value so fixed shall not be satisfac- 
tory to any such shareholder, he may appeal to the Comp- 
troller of the Currency, who shall cause a reappraisal 
to be made, which shall be final and binding; and if said 
reappraisal shall exceed the value fixed by said commit- 
tee, the bank shall pay the expenses of said reappraisal, 
and otherwise the appellant shall pay said expenses; and 
the value so ascertained and determined shall be deemed 
to be a debt due, and be forthwith paid, to said share- 
holder from said bank; and the shares so surrendered 
and appraised shall, after due notice, be sold at public 
sale, withtin thirty days after the final appraisal provided 
in this section : Provided, That in the organization of any 
banking association intended to replace any existing 
banking association, and retaining the name thereof, the 
holders of stock in the expiring association shall be enti- 
tled to preference in the allotment of the shares of the 
new association in proportion to the number of shares 
held by them respectively in the expiring association. 

REDEMPTION OF CIRCULATING} NOTES ISSUED PRIOR TO 
EXTENSION. ACT JULY 12, 1882. 

1882.* 'c"^^20o; 22^- ^^^- ^- — That the circulating notes of any associa- 
sec. 6^; 22 Stat! tion SO extending the period of its succession which shall 
" * have been issued to it prior to such extension shall be re- 

deemed at the Treasur}^ of the United States, as provided 
in section three of the act of June twentieth, eighteen 
hundred and seventy-four, entitled "An act fixing the 
amount cf United States notes, providing for redistribu- 
tion of national bank currency, and for other purposes," 
and such notes when redeemed shall be forwarded to the 
Comptroller of the Currency, and destroyed as now pro- 
vided by law; and at the end of three years from the date 



ORGANIZATION AND POWERS. 31 

of the extension of the corporate existence of each bank 
the association so extended shall deposit lawful money 
with the Treasurer of the United States sufficient to re- 
deem the remainder of the circulation which was out- 
standing at the date of its extension, as provided in 
sections fifty-two hundred and twenty-two, fifty-two 
hundred and twenty-four, and fifty-two hundred and 
twenty-five' of the Revised Statutes; and any gain that 
may arise from the failure to present such circulating 
notes for redemption shall inure to the benefit of the 
United States; and from time to time, as such notes are 
redeemed or lawful money deposited therefor as provided 
herein, new circulating notes shall be issued as provided 
by this act, bearing such devices, to be approved by the 
Secretary of the Treasury, as shall make them readily 
distinguishable from the circulating notes heretofore 
issued: Provided^ however^ That each banking associa- 
tion which shall obtain the benefit of this act shall reim- 
burse to the Treasury the cost of preparing the plate or 
plates for such new circulating notes as shall be issued 
to it. 

Note. — For act of June 20, 1874, section 3, mentioned above, 
see paragraph 414, post. The destruction of bank notes by burn- 
ing, as provided in sections 5184, 5225, Revised Statutes, is super- 
seded by act of June 23. 1874, paragraph 340, post, which requires 
bank notes to be macerated. 

DISSOLUTION OF BANKS NOT EXTENDING PERIOD Ob' 
SUCCESSION. ACT JULY 12, 1882. 

221, Sec. 7. — That national banking associations whose |^t "^"'^290' 
corporate existence has expired or shall hereafter expire sec.~7 ; 22 statl 
and which do not avail themselves of the provisions of ^' ^^** 
this act, shall be required to comply with the provisions 
of sections fifty-two hundred and twenty-one and fifty- 
two hundred and twenty-two of the Eevised Statutes in 
same manner as if the shareholders had voted to go 
into liquidation, as provided in section fifty-two hundred 
and twenty of the Kevised Statutes; and the provisions 
of sections fifty-two hundred and twenty-four and fifty- 
two hundred and twenty-five of the Revised Statutes 
shall also be applicable to such associations, except as 
modified by this act; and the franchise of such associa- 
tions is hereby extended for the sole purpose of liquidat- 
ing their affairs until" such affairs are finally closed. 

Note.— other sections of act of July 12, 1882. 

Sec. 8. [Relates to bond deposits and circulating notes.] Fol- 
lows Revised Statutes, section 5167. 

Sec. 9. — [Relates to withdrawal of circulating notes.] Follows 
Revised Statutes, section 5167. 

Sec. 10. — Repealed sections 5171 and 5176, Revised Statutes, 
and was superseded by act of March 14, 1900. (See section 5171, 
Revised Statutes.) 

Sec. 11. — Authorizes the exchange of three per cent bonds for 
outstanding three and one-half per cent bonds. 

Sec. 12. — Authorizes the issue of gold certificates upon the de- 
posit of gold coin. Inserted after section 5207. 

Sec. 13. — [Relates to false certification of checks.] Superseded 
by act of Sept. 26, 1918. 



32 OEGANIZATION AND POW'ERS. 

REEXTENSION OF CORPORATE EXISTENCE. ACT OP 
APRIL 12, 1902. 

19^2!' "^^^^50^1; ^^^- Tliat the Comptroller of the Currency is hereby 
32^"'stat. L.', authorized, in the manner provided by, and under the 
conditions and limitations of, the act of July 12, 1882, to 
extend for a further period of twenty j-eare the charter 
of any national banking association extended under said 
act which shall desire to continue its existence after the 
expiration of its charter. 

POWER TO HOLD REAL PROPERTY. 

Act J"°e ^, 223. Sec. 5137. — A national banking association may 
sec. ' 28 ; 13 purchase, hold, and convey real estate for the following 
Stat. L., 107. purposes, and for no others: 

First. Such as shall be necessary for its immediate ac- 
commodation in the transaction of its business. 

Second. Such as shall be mortgaged to it in good faith 
by way of security for debts previously contracted. 

Third. Such as shall be conveyed to it in satisfaction of 
debts previously contracted in the course of its dealings. 

Fourth. Such as it shall purchase at sales under judg- 
ments, decrees, or mortgages held by the association, or 
shall purchase to secure debts due to it. 

But no such association shall hold the possession of any 
real estate under mortgage, or the title and possession of 
any real estate purchased to secure any debts due to it, 
for a longer period than five years. 

Note. — For power to loan on real estate see paragraph 205, 
ante, 

REQUISITE AMOUNT OF CAPITAL. 

1864* c"°\o6' 2^^- ^®°- ^^^^ t^^ amended 1900] — No association shall 
sec. 7 ; 13 Stat! be organized with a less capital than one hundred thou- 
^"Act^ Mar. 14, sand dollars, except that banks with a capital of not less 
1900. c. 41. seel ^j^j^j^ flfj-y thousaud dollars may, with the approval of the 

10 ; 31 btat, '' p T rr\ 1 •!• 1 1 

L., 48. Secretary oi the 1 reasury, be organized m any place the 

population of which does not exceed six thousand inhab- 
itants, and except that banks with a capital of not less 
than twenty-five thousand dollars may, with the sanction 
of the Secretary of the Treasury, be organized in any 
place the population of which does not exceed three 
thousand inhabitants. Xo association shall be organized 
in a city the population of which exceeds fifty thousand 
persons with a capital of less than two hundred thousand 
dollars. 

SHARES OF STOCK AND TRANSFERS. 

1864,* f""1o(;: 225. Sec. 5139.— The capital stock of each association 

si^"t' L^'io-^^^ -hall be divided into shares of one hundred dollars each, 

and be deemed personal property, and transferable on the 

books of the association in such manner as may be pre- 



ORGANIZATION AND POWERS. 33 

scribed in the by-laws or articles of association. Every 
person becoming a shareholder by such transfer shall, in 
proportion to his shares, succeed to all rights and lia- 
bilities of the prior holder of such shares ; and no change 
shall be made in the articles of association by which the 
rights, remedies, or security of the existing creditors of 
the association shall be impaired. 

Note. — See also section 23, Federal reserve act, following sec- 
tion 5151, United States Revised Statutes. 

HOW PAYMENT OF THE CAPITAL STOCK MUST BE MADE 
AND CERTIFIED. 

226. Sec. 5140. — At least fifty per centum of the capital ^^Act J"°e 3. 
stock of every association shall be paid in before it shall sec. ' i4; i3 
be authorized to commence business ; and the remainder ^^^^- ^' ^^^• 
of the capital stock of such association shall be paid in 
installments of at least ten per centum each, on the whole 

amount of the capital, as frequently as one installment 
at the end of each succeeding month from the time it 
shall be authorized by the Comptroller of the Currency 
to commence business; and the payment of each install- 
ment shall be certified to the Comptroller, under oath, by 
the president or cashier of the association. 

PROCEEDINGS IF SHAREHOLDER FAILS TO PAY INSTALL- 
MENTS. 

227. Sec. 5141. — Whenever any shareholder, or his as- Act Jui^^ 3. 
signee, fails to pay any installment on the stock when the sec. ' i5 ; is 
same is required by the preceding section to be paid, the ^*^^ ^- ^^^' 
directors of such association may sell the stock of such 
delinquent shareholder at public auction, having given 

three weeks' previous notice thereof in a newspaper pub- 
lished and of general circulation in the city or county 
where the association is located, or if no newspaper is 
published in said city or countj', then in a newspaper 
published nearest thereto, to any person who will paj' the 
highest price therefor, to he not less than the amount then 
due thereon, with the expenses of advertisement and sale ; 
and the excess, if any, shall be paid to the delinquent 
shareholder. If no bidder can be found who will pay for 
such stock the amount due thereon to the association, and 
the cost of advertisement and sale, the amount previously 
paid shall be forfeited to the association, and such stock 
shall be sold as the directors ma}' order, within six months 
from the time of such forfeiture, and if not sold it shall 
be canceled and deducted from the capital stock of the 
association. If any such cancellation and reduction shall 
reduce the capital of the association below the minimum 
of capital required by law, the capital stock shall, within 
thirty days from the date of such cancellation, be in- 
creased to the required amount; in default of which a 
receiver may be appointed, according to the provisions 

164:512°— 20 3 



34 OEGANIZATIOIT AND POW'ERS. 

of section fifty-two hundred and thirty-four, to close up 
the business of the association. 

NATIONAL BANKS MAY INCREASE CAPITAL STOCK. 

Act June 3, 228. Sec. 5142. — Any association formed under this title 
fie<\^' 13; ^ 1^3 may, by its articles of association, provide for an increase 
stilt. L.. 103. Q^ -^g capital from time to time, as may be deemed expe- 
dient, subject to the limitations of this title. But the 
maximum of such increase to be provided in the articles 
of association shall be determined by the Comptroller of 
the Currency; and no increase of capital shall be valid 
until the whole amount of such increase is paid in. and 
notice thereof has been transmitted to the Comptroller 
of the Currency, and his certificate obtained specifying 
the amount of such increase of capital stock, with his 
approval thereof, and that it has been duly paid in as 
part of the capital of such association. 

INCREASE OF CAPITAL STOCK. ACT MAY 1, 1886. 

Act May 1, 229. Sec. 1. — That anv national banking association 
if 24%tat.T; may, with the approvalof the Comptroller of the Cur- 
1®' rency, by the vote of shareholders owning two-thirds of 

the stock of such association, increase its capital stock, in 
accordance with existing laws, to any sum approved by 
the said Comptroller, notwithstanding the limit fixed in 
its original articles of association and determined by said 
Comptroller ; and no increase of the capital stock of any 
national banking association either within or beyond the 
limit fixed in its original articles of association shall be 
made except in the manner herein provided. 

Note. — For other sections of this act see paragraphs 211, 212, 
and 213, ante. 

REDUCTION OF CAPITAL STOCK. 

Act June 3, 230. Scc. 5143. — Any association formed under this title 
Bec^^' 13; ^^1^3 may, by the vote of shareholders owning two-thirds of 
Stat. L., 103. jts capital stock, reduce its capital to any sum not below 
the amount required by this title to authorize the forma- 
tion of associations; but no such reduction shall be allow- 
able which will reduce the capital of the association below 
Act Dec. 23, the amount required for its outstanding circulation, nor 
38^^ si&t' ^l' shall any reduction be made until the amount of the pro- 
274. ' " posed reduction has been reported to the Comptroller of 
the Currency and such reduction has been approved by 
the said Comptroller of the Currency and by the Federal 
Reserve Board, or by the organization committee pend- 
ing the organization of the Federal Reserve Board. 

EIGHT OF SHAREHOLDERS TO TOTE; PROXIES AUTHOR- 
IZED. 

Act June 3, 231. Sec. 5144. — ^In all elections of directors, and in 
sp^c^^' 11; ^Tk deciding all questions at meetings of shareholders, each 
Stat. L., 102. shareholder shall be entitled to one vote on each share of 



ORGANIZATION AND POWERS. 35 

stock held by him. Shareholders may vote by proxies 
duly authorized in writing ; but no officer, clerk, teller, or 
bookkeeper of such association shall act as proxy; and 
no shareholder whose liability is past due and unpaid 
shall be allowed to vote. 

Note. — The Circuit Court of the United States, in United States 
V. Barry (36 F. R., 246). held that the words "liability past due 
and unpaid " referred only to unpaid subscriptions for stock. 

ELECTION OF DIRECTORS. 

232. Sec. 5145.— The affairs of each association shall be Act Juno s, 
managed by not less than five directors, who shall besecs.'9,*^io; I'i 
elected by the shareholders at a meeting to be held at any ^*^**- ^•' ^^'^■ 
time before the association is authorized by the Comp- 
troller of the Currency to commence the business of bank- 
ing ; and afterward at meetings to be held on such day in 
January of each year as is specified therefor in the 

articles of association. The directors shall hold office for 
one year, and until their successors are elected and have 
qualified. 

REQUISITE QUALIFICATION OF DIRECTORS. 

233. Sec. 5146 [amended 1905].— Every director must,, ^ct June .3. 

J • u- V, 1 J- £ ■ 1 -J.- J! j_i '1864, c. lOG, 

during his whole term of service, be a citizen or the sees, o, io: i:{ 
United States, and at least three-fourths of the direc- ^^Act^Feb.^iis. 
tors must have resided in the State, Territory, or District g^^^^^^t ^^l*'' 
in which the association is located for at least one year sis. ' 
immediately preceding their election and must be resi- 
dents therein during their continuance in office. Every 
director must own in his own right at least ten shares of 
the capital stock of the association of which he is a di- 
rector, unless the capital of the bank shall not exceed 
twenty-five thousand dollars, in which case he must own 
in his own right at least five shares of such capital stock. 
Any director who ceases to be the owner of the required ■ 
number of shares of the stock, or who becomes in any 
other manner disqualified, shall thereby vacate his place. 

INTERLOCKING DIRECTORATES— WHEN FORBIDDEN. 

234. Sec. 8. — That from and after two years from the ■^<'t oct. i5. 
date of the approval of this act no person shall at the st^a\^'L..' T^oii!^'' 
same time be a director or other officer or employee of 

more than one bank, banking association, or trust com- 
pany, organized or operating under the laws of the United 
States, either of which has deposits, capital, surplus, and 
undivided profits aggregating more tlian $5,000,000; and 
no private banker or person who is a director in any bank 
or trust company, organized and operating under the laws 
of a State, having deposits, capital, surplus, and undi- 
vided profits aggregating more than $5,000,000. shall be 
eligible to be a director in any bank or banking associa- 



36 OKGANIZATION AND POWERS. 

tion organized or operating under the laws of the United 
States. The eligibility of a director, officer, or employee 
under the foregoing provisions shall be determined by 
the average amount of deposits, capital, surplus, and un- 
divided profits as shown in the official statements of such 
bank, banking association, or trust company filed as pro- 
vided by law during the fiscal year next preceding the 
date set for the annual election of directors, and when a 
director, officer, or employee has been elected or selected 
in accordance with the provisions of this Act it shall be 
lawful for him to continue as such for one year thereafter 
under said election or employment. 

No bank, banking association, or trust company, or- 
ganized or operating under the laws of the United States, 
in any city or incorporated town or village of more than 
two hundred thousand inhabitants, as shown by the last 
preceding decennial census of the United States, shall 
have as a director or other officer or employee any private 
banker or any director or other officer or employee of 
any other bank, banking association, or trust company 
located in the same place : Provided^ That nothing in this 
section shall apply to mutual savings banks not having a 
capital stock represented by shares: Provided further^ 
That a director or other officer or employee of such bank, 
banking association, or trust company may be a director or 
other officer or employee of not more than one other bank 
or trust company organized under the laws of the United 
States or any State where the entire capital stock of one 
is owned by stockholders in the other: And 'provided 
further^ That nothing contained in this section shall forbid 
a director of class A of a Federal reserve bank, as defined 
in the Federal reserve act, from being an officer or 
director or both an officer and director in one member 
15 b^^k* ^^^ 'provided further^ That nothing in this act 
1916; 39^^stat! shall prohibit any officer, director, or employee of any 
L., 121. member bank or class A director of a Federal reserve 

bank, who shall first procure the consent of the Federal 
Reserve Board, which board is hereby authorized, at its 
discretion, to grant, withhold, or revoke such consent, 
from being an officer, director, or employee of not more 
than two other banks, banking associations, or trust 
companies, whether organized under the laws of the 
United States or any State, if such other bank, banking 
association, or trust company is not in substantial com- 
petition with such member bank. 

The consent of the Federal Reserve Board may be 
procured before the person applying therefor has been 
elected as a class A director of a Federal reserve bank or 
as a director of any member bank. 

That from and after two years from the date of the 
approval of this act no person at the same time shall be a 
director in any two or more corporations, any one of 
which has capital, surplus, and undivided profits aggre- 



ORGANIZATION AND POWERS. 37 

gating more than $1,000,000, engaged in whole or in part 
in commerce, other than banks, banking associations, 
trust companies and common carriers subject to the 
act to regulate commerce, approved February fourth, 
eighteen hundred and eighty-seven, if such corporations 
are or shall have been theretofore, by virtue of their 
business and location of operation, competitors, so that 
the elimination of competition by agreement between 
them would constitute a violation of any of the provisions 
of any of the antitrust laws. The eligibility of a director 
under the foregoing provision shall be determined by the 
aggregate amount of the capital, surplus, and undivided 
profits, exclusive of dividends declared but not paid to 
stockholders, at the end of the fiscal year of said corpora- 
tion next preceding the election of directors, and when a 
director has been elected in accordance with the provi- 
sions of this act it shall be lawful for him to continue as 
such for one year thereafter. 

When any person elected or chosen as a director or 
oflEicer or selected as an employee of any bank or other 
corporation subject to the provisions of this act is eligible 
at the time of his election or selection to act for such bank 
or other corporation in such capacity his eligibility to act 
in such capacity shall not be affected and he shall not 
become or be deemed amenable to any of the provisions 
hereof by reason of any change in the affairs of such bank 
or other corporation from whatsoever cause, whether 
specifically excepted by any of the provisions hereof or 
not, until the expiration of one year from the date of his 
election or employment. 

Note. — See Sec. 25, Federal reserve act, page 165, post, in refer- 
ence to directors of foreign branches. 

ENFORCEMENT OF ACT IN REFERENCE TO INTERLOCK- 
ING DIRECTORATES. 

235. Sec. 11. — That authority to enforce compliance ^^Act Oct. i5, 
with sections two, three, seven and eight of this act by as stat." l.) 
the persons respectively subject thereto is hereby vested : '^^* 
in the Interstate Commerce Commission where applicable 
to common carriers, in the Federal Reserve Board where 
applicable to banks, banking associations and trust com- 
panies, and in the Federal Trade Commission where ap- 
plicable to all other character of commerce, to be exer- 
cised as follows: 

Whenever the commission or board vested with juris- 
diction thereof shall have reason to believe that any 
person is violating or has violated any of the provisions 
of sections two, three, seven, and eight of this act, it shall 
issue and serve upon such person a complaint stating its 
charges in that respect, and containing a notice of a 
hearing upon a day and at a place therein fixed at least 
thirty days after the service of said complaint. The 



38 ORGANIZATION AND POWERS. 

person so complained of shall have the right to appear 
at the place and time so fixed and show cause why an 
order should not be entered by the commission or board 
requiring such person to cease and desist from the vio- 
lation of the law so charged in said complaint. Any 
person may make application, and upon good cause shown 
may be allowed by the commission or board, to intervene 
and appear in said proceeding by counsel or in person. 
The testimony in any such proceeding shall be reduced to 
writing and filed in the office of the commission or board. 
If upon such hearing the commission or board, as the 
case may be, shall be of the opinion that any of the pro- 
visions of said sections have been or are being violated, it 
shall make a report in writing in which it shall state its 
findings as to the facts, and shall issue and cause to be 
served on such person an order requiring such person to 
cease and desist from such violations, and divest itself of 
the stock held or rid itself of the directors chosen con- 
trary to the provisions of sections seven and eight of this 
act, if any there be, in the manner and within the time 
fixed by said order. Until a transcript of the record in 
such hearing shall have been filed in a circuit court of 
appeals of the United States, as hereinafter provided, 
the commission or board may at any time, upon such no- 
tice and in such manner as it shall deem proper, modify 
or set aside, in whole or in part, any report or any order 
made or issued by it under this section. 

If such person fails or neglects to obey such order of 
the commission or board while the same is in effect, the 
commission or board may apply to the circuit court of 
appeals of the United States, within any circuit where 
the violation complained of was or is being committed 
or where such person resides or carries on business, for 
the enforcement of its order, and shall certify and file 
with its application a transcript of the entire record in 
the proceeding, including all the testimony taken and the 
report and order of the commission or board. Upon such 
filing of the application and transcript the court shall 
cause notice thereof to be served upon such person and 
thereupon shall have jurisdiction of the proceeding and 
of the question determined therein, and shall have power 
to make and enter upon the pleadings, testimony, and 
proceedings set forth in such transcript a decree affirm- 
ing, modifj'ing, or setting aside the order of the commis- 
sion or board. The findings of the commission or board 
as to the facts, if supported by testimony, shall be con- 
clusive. If either party shall apply to the court for leave 
to adduce additional evidence, and shall show to the satis- 
faction of the court that such additional evidence is ma- 
terial and that there were reasonable grounds for the 
failure to adduce such evidence in the proceeding before 
the commission or board, the court may order such addi- 
tional evidence to be taken before the commission oi 



ORGANIZATION AND POWERS. 39 

board and to be adduced upon the hearing in such man- 
ner and upon such terms and conditions as to the court 
may seem proper. The commission or board may modify 
its findings as to the facts, or make new findings, by rea-. 
son of the additional evidence so taken, and it shall file 
such modified or new findings, which, if supported by 
testimon}', shall be conclusive, and its recommendations, 
if any, for the modification or setting aside of its original 
order, with the return of such additional evidence. The 
judgment and decree of the court shall be final, except 
that the same shall be subject to review by the Supreme 
Court upon certiorari as provided in section two hundred 
and forty of the Judicial Code. 

Any party required by such order of the commission 
or board to cease and desist from a violation charged 
may obtain a review of such order in said circuit court of 
appeals by filing in the court a written petition praying 
that the order of the commission or board be set aside. 
A copy of such petition shall be forthwith served upon 
the commission or board, and thereupon the commis- 
sion or board forthwith shall certify and file in the court 
a transcript of the record as hereinbefore provided. 
Upon the filing of the transcript the court shall have the 
same jurisdiction to afhrm, set aside, or modify the order 
of the commission or board as in the case of an applica- 
tion by the commission or board for the enforcement of 
its order, and the findings of the commission or board as 
to the facts, if supported bj- testimony, shall in like man- 
ner be conclusive. 

The jurisdiction of the circuit court of appeals of the 
United States to enforce, set aside, or modify orders of 
the commission or board shall be exclusive. 

Such proceedings in the circuit court of appeals shall 
be given precedence over other cases pending therein, 
and shall be in every way expedited. No order of the 
commission or board or the judgment of the court to 
enforce the same shall in any wise relieve or absolve any 
person from any liability under the antitrust acts. 

Complaints, orders, and other processes of the commis- 
sion or board under this section may be served by any- 
one duly authorized by the commission or board, either 
(a) by delivering a copy thereof to the person to be served, 
or to a member of the partnership to be served, or to the 
president, secretary, or other executi\ e officer or a direc- 
tor of the corporation to be served; or (b) by leaving a 
copy thereof at the principal office or place of business of 
such person; or (c) by registering and mailing a copy 
thereof addressed to such person at his principal office or 
place of business. The verified return by the person so 
serving said complaint, order, or other process setting 
forth the manner of said service shall be proof of the 
same, and the return post-office receipt for said complaint, 
order, or other process registered and mailed as aforesaid 
Bhall be proof of the service of the same. 



40 OEGANIZATTON AND PO^\^JRS. 

OATH REQUIRED FROM DIRECTORS. 

1864* c"°io6: 226- ^^^' 5147.— Each director, when appointed or 
sec. 9 ; 13 Stat! elected, shall take an oath that he will, so far as the duty 
devolves on him, diligently and honestly administer the 
affairs of such association, and will not knowingly violate, 
or willingly permit to be violated, any of the provisions 
of this title, and that he is the owner in good faith, and in 
his own right, of the number of shares of stock required 
by this title, subscribed by him, or standing in his name 
on the books of the association, and that the same is not 
hypothecated, or in any way pledged, as security for any 
loan or debt. Such oath, subscribed by the director mak- 
ing it, and certified by the officer before whom it is taken, 
shall be immediately transmitted to the Comptroller of 
the Currency, and shall be filed and preserved in his Office. 

FILLING VACANCIES. 

180? c"°%i: 237. Sec. 5148.— Any vacancy in the board shall be 
sec. ' 10 ; 13 filled by appointment bj^ the remaining directors, and 

any director so appointed shall hold his place until the 

next election. 

PROCEEDINGS WHERE NO ELECTION IS HELD ON THE 
PROPER DAT. 

186? c"°i06; ^^^- S^c- 5149. — If, from any cause, an election of di- 
|ec.^' 10 ; 13 rectors is not made at the time appointed, the association 
shall not for that cause be dissolved, but an election may 
be held on any subsequent day, thirty days' notice thereof 
in all cases having been given in a newspaper published 
in the cit3^ town, or county in which the association is 
located; and if no newspaper is published in such city, 
town, or county, such notice shall be published in a news- 
paper published nearest thereto. If the articles of asso- 
ciation do not fix the day on which the election shall be 
held, or if no election is held on the day fixed, the day for 
the election shall be designated by the board of directors 
in their by-laws, or otherwise ; or if the directors fail to 
fix the day, shareholders representing two-thirds of the 
shares may do so. 

ELECTION OF PRESIDENT OF THE BOARD. 

180? c"°%o' ^^^- ^^^- ^^^^- — ^^^ ^^ ^^^^ directors, to be chosen by 
Bee. ^ ; 13 Stat! the board, shall be the president of the board. 

L., 102. 

INDIVIDUAL LIABILITY OF SHAREHOLDERS. 

18G? c"°'i06' ^^^- ^^^- ^^^^- — "^^^^ shareholders of every national 

Bee. ' 12; ^i.j banking association shall be held individually responsi- 

stat. L., 102, Yf\Q^ equally and ratably, and not one for another, for all 

contracts, debts, and engagements of such association, to 

the extent of the amount of their stock therein, at the 

par value thereof, in addition to the amount invested in 



ORGANIZATION AND POWERS. 41 

siicli shares; except that shareholders of any banking 
association now existing under State laws, havincr not 
less than five millions of dollars of capital actually paid 
in. and a surplus of twenty per centum on hand, both to 
be determined by the Comptroller of tlie Currency, shall 
be liable only to the amount invested in their shares; 
and such surplus of twenty per centum shall be kept 
undiminished, and be in addition to tl^e surplus provided 
for in this title; and if at any time there is a deficiency 
in such surplus of twenty per centum, such association 
shall not pay any dividends to its shareholders until tho 
deficiency is made good; and in case of such deficiency, 
the Comptroller of^the Currency may compel the asso- 
ciation to close its business and wind up its affairs under 
the provisions of chapter four ^ of this title. 

Note. — See act of June 30, 1S76, paragraph 521, post, for en- 
forcement of liability prescribed by this section in cases of 
voluntary liquidation. 

INDITIDUAL LIABILITY OF SHAREHOLDERS— LIABILITY 
OF SHAREHOLDERS WHO HATE TRANSFERRED THEIR 
SHARES. 

241. Sec 23. — The stockholders of every national bank- ^^^ff ^^c. ^2^3, 
ing association shall be held individually responsible for p 'stat.' l.', 
all contracts, debts, and engagements of such association. 

each to the amount of his stock therein, at the par value 
thereof in addition to the amount invested in such stock. 
The stockholders in any national banking association who 
shall have transferred their shares or registered the trans- 
fer thereof within sixty daj's next before the date of the 
failure of such association to meet its obligations, or with 
knowledge of such impending failure, shall be liable to 
the same extent as if they had made no such transfer, to 
the extent that the subsequent transferee fails to meet 
such liability; but this provision shall not be construed to 
affect in any way an}- recourse which such shareholders 
might otherwise have against those in whose names such 
shares are registered at the time of such failure. 

EXECXTORS, TRUSTEES, ETC.. NOT PERSONALLY LIABLE. 

242. Sec. 5152. — Persons holding stock as executors, ad- ,„-5?* •^""^,«i' 
mmistrators, guardians, or trustees, shall not be person- spc 63: 13 
ally subject to any liabilities as stockholders; but the ^*'**" ^■' ^^^' 
estates and funds in their hands shall be liable in like 

manner and to the same extent as the testator, intestate, 
ward, or person interested in such trust-funds would be, 
if living and competent to act and hold the stock in his 
own name. 



1 Chapter 5 of this compilation. 



42 ORGANIZATION AND POWERS. 

NATIONAL BANKING ASSOCIATIONS TO BE DEPOSITA 
KIES OF PUBLIC MONEYS. 

1864* c"°i06' ^^^- ^®^- ^^^^ [^^ amended 1907]. — All national banking 
sec. ' 45; 13 associations, designated for that purpose by the Secre- 
^ Act.^Mar.^'3, tary of the Treasur}^, shall be depositaries of public 
sec*\ • 31 itat ^^^^^^^Ji Under such regulations as may be prescribed by 
L.,'i448. 'the Secretary; and they ma}' also be employed as finan- 
1907!^" c^Yoit; tial agents of the Government ; and they shall perform 
L*^i2bo^ ^^'^*" '^^^ such reasonable duties, as depositaries of public money 
and financial agents of the Government, as may be re- 
quired of them. The Secretary of the Treasury shall 
require the associations thus designated to give satisfac- 
tory security, by the deposit of United States bonds and 
otherwise, for the safe-keeping and prompt payment of 
the public money deposited with them, and for the faith- 
ful performance of their duties as financial agents of the 
Government : Provided, That the Secretary shall, on or 
before the first of Januaiw of each year, make a public 
statement of the securities required during that year for 
such deposits. And every association so designated as 
receiver or depositary of the public money shall take and 
receive at par all of the national currency bills, by what- 
ever association issued, which have been paid into the 
Government for internal revenue, or for loans or stocks : 
Provided, That the Secretary of the Treasury shall dis- 
tribute the deposits herein provided for, as far as practi- 
cable, equitably between the different States and sections. 

Note. — For other .provisions relating to duties and liabilities of 
depositaries see following sections of the Revised Statutes of the 
United States : 

Sec. 3640. Transfer of moneys from depositaries to Treasury 
authorized. 

Sec. 3641. Transfer of postal deposits. 

Sec. 3642. Accounts of postal deposits. 

Sec. 3643. Entry of each deposit, transfer, and payment. 

Sec. 3644. Public moneys in Treasury and depositaries subject 
to draft of Treasurer. 

Sec. 3645. Regulations for presentment of drafts. 

Sec. 3646. Duplicates for lost or stolen checks authorized. 

Sec. 3647 and amendments. Duplicate check when officer who 
issued is dead. 

Sec. 3648 and amendments. Advances of public money pro- 
hibited. 

Sec. 3649. Examination of depositaries. 

See also Government Depositaries, paragraphs 730-738, post. 

GOTERNMENT DEPOSITS IN FEDERAL RESERTE BANKS. 

Act Dec. 23, 244. Sec. 15. — The moneys held in the general fund of 

:^is^^'sta't!' ^L.ithe Treasury, except the five per centum fund for the 

2G5. redemption of outstanding national-bank notes and the 

funds provided in this act for the redemption of Federal 

reserve notes may, upon the direction of the Secretary of 

the Treasury, be deposited in Federal reserve banks, 



ORGAXIZATIOX AND POWERS. 43 

which banks, when required by the Secretary of the 
Treasury, shall act as fiscal agents of the United States; 
and the revenues of the Government or any part thereof 
may be deposited in such banks, and disbursements may 
be made by checks drawn against such deposits. 

Xo public funds of the Philippine Islands, or of the 
postal savings, or any Government funds, shall be de- 
posited in the continental United States in any bank not 
belonging to the system established by this act: Pro- 
vided, however, That nothing in this act shall be con- 
strued to deny the right of the Secretary of the Treasury 
to use member banks as depositories. 

Note. — Section 7 of the act approved April 24, 1917, known as 
"An act to autliorize an issue of bonds to meet expenditures for 
the national security and defense, and, for the purpose of assist- 
ing in the prosecution of the war, to extend credit to foreign gov- 
ernments, and for other purposes." authorizes the Secretary to 
deposit proceeds of sale of such bonds in uonmember banks un- 
der certain circumstances. For full text of section 7 see page 
184, post. 

CONTERSION OF STATE BANKS INTO NATIONAL BANK- 
ING ASSOCIATIONS. 

245. Sec. 5154. — Anv bank incorporated by special law -'^ct June 3. 

. ,-, f 1 " T-r • , 1 r^ , • 1 1 1od4, C. lOo, 

of any State or of the United States or organized under sec. 44; la 
the general laws of any State or of the United States and ^*Act^f>e"^23. 
having an unimpaired capital sufficient to entitle it to i|i3,g^sec. 8; 
become a national banking association under the pro- 258. 
visions of the existing laws may, by the vote of the 
shareholders owning not less than fifty-one per centum 
of the capital stock of such bank or banking association, 
with the approval of the Comptroller of the Currency 
be converted into a national banking association, with 
any name approved by the Comptroller of the Currency : 
Provided, however , That said conversion shall not be in 
contravention of the State law. In such case the articles 
of association and organization certificate may be exe- 
cuted by a majority of the directors of the bank or bank- 
ing institution, and the certificate shall declare that the 
owners of fifty-one per centum of the capital stock have 
authorized the directors to make such certificate and to 
change or convert the bank or banking institution into a 
national association. A majority of tlie directors, after 
executing the articles of association and the organization 
certificate, sliall have power to execute all other papers 
and to do whatever may be required to make its organiza- 
tion perfect and complete as a national association. The 
shares of any such bank may continue to be for the same 
amount each as they were before the conversion, and the 
directors may continue to be directors of the association 
until others are elected or appointed in accordance with 
the provisions of the statutes of the United States. When 
the Comptroller has given to such bank or banking asso- 
ciation a certificate that the provisions of this Act have 



44 ORGANIZATION AND POWERS. 

been complied with, such bank or banking association, 
and all its stockholders, officers, and employees, shall 
have the same powers and privileges, and shall be subject 
to the same duties, liabilities, and regulations, in all re- 
spects, as shall have been prescribed by the Federal Re- 
serve Act and by the national banking Act for associa- 
tions originally organized as national banking associa- 
tions. 

Note. — The act of 1864 authorized any State bank which was a 
stockholder in any other bank, by authority of State laws, to con- 
tinue to hold its stock, although either bank or both might have 
become converted into national banks. This provision was Incor- 
porated in section 5154, United States Revised Statutes, but was 
stricken out in the revision of this section by the act of December 
23, 1913. 

STATE BANKS HATING BRANCHES. 

i865,*c.^7s?se?: 246. Scc. 5155.— It shall be lawful for any bank or 

7 : 13 Stat. L., banking association organized under State laws, and hav- 

4S4 ^ . . . . ' 

ing branches, the capital being ]oint and assigned to and 
used by the mother bank and branches in definite propor- 
tions, to become a national banlving association in con- 
formity with existing laws, and to retain and keep in 
operation its branches, or such one or more of them as it 
may elect to retain; the amount of the circulation re- 
deemable at the mother bank, and each branch, to be 
regulated by the amount of capital assigned to and used 
by each. 

RESERYATION OF RIGHTS OF ASSOCIATIONS ORGANIZED 
UNDER ACT OF 1863. 

1864* i"°ioi: 247. Sec. 5156.— Nothing in this title shall effect any 
Stat l"'ii8^^'^PP*^^^^"^^^^^ made, acts done, or proceedings had or 
coimnenced prior to the third day of June, eighteen hun- 
dred and sixty-four, in or toward the organization of any 
national banking association under the act of Februarv 
twenty-five, eighteen hundred and sixty-three; but all 
associations which, on the third day uf June, eighteen 
hundred and sixty-four, were organized or commenced to 
V be organized under that act, shall enjoy all the rights and 
privileges granted, and be subject to all the duties, liabili- 
ties, and restrictions imposed by this title, notwithstand- 
ing all the steps prescribed by this title for the organiza- 
tion of associations were not pursued, if such associations 
were duly organized under that act- 



OEGANIZATION AND POWERS. 45 



46 ORGAXiZATiUJS' AND POWEi^, 



OBTAINING AND ISSUING CIRCULATING NOTES. 



47 



CHAPTER III. 



OBTAINING AXD ISSUING CIRCULATING NOTES. 



300. 5157. What associations are gov- 
erned by provisions of 
cliapters two, three, and 
four. 

801. 5158. Registered bonds intended 
by the term "United 
States bonds." 

302. Act December 23, 1913, as amend- 

ed. Deposit of bonds not 
required before issuance 
of certificate authorizing 
t li e commencement of 
business. 

303. Act December 21, 1905. Two per 

cent Panama Canal 
bonds have all rights and 
privileges accorded to 
other two per cent bonds 
of the United States. 

304. 5160. Increase or reduction of 

deposit to correspond 
with capital. 

305. 5161. Exchange of coupon for 

registered bonds. 

306. 5162. Manner of making trans- 

fers of bonds. 

307. 5163. Kegistrv of transfers. 

308. 5164. Notice of transfer to be 

given to association in- 
terested. 

309. 5165. Examination of registry 

and bonds. 

310. 5160. Annual examination of 

bonds by association. 

311. 5167. General provisions respect- 

ing bonds. 

312. Act June 20, 1874. Withdrawal 

of circulating notes on 
deposit of lawful money 
and withdrawal of bonds. 

313. Act July 12, 1882. Amount <.f 

bonds required to be on 
deposit; reduction of 
amount or retirement in 
full of circulating notes. 

314. Act July 12, 1882, and act March 

4, 1907. Limitation on 
withdrawal of bonds ; 
consent of Comptroller of 
Currency and Secretary 
of the Treasury neces- 
sary. 

161312°— 20 4 



315. Act December 23, 1913. Refund- 

ing of bonds under Fed- 
eral reserve act ; i-etire- 
ment of circulating notes. 

316. Act December 23, 1913. Pur- 

chase of United States 
bonds by Federal reserve 
banks. 

317. Act December 23, 1913. Issue of 

circulating notes to Fed- 
eral reserve banks on se- 
curity of United States 
bonds : circulating notes 
so issued obligations of 
Federal reserve bank. 
Act December 23, 1913. Issue of 
Treasury gold notes of 
the United States in ex- 
change for certain United 
States bonds. 

5168. Comptroller to determine 
if association can com- 
mence business. 

5169. Certificate of authority to 
commence banking to be 
issued. 

5170. Publication of certificate. 

5171. Repealed by act July 12, 
1SS2. 

Act March 14, 1900, as amended. 
Delivery of circulating 
notes. 

5172. Printing denominations 

and form of the circulat- 
ing notes. 

325. Act June 20, 1874. Charter num- 

ber to be printed on 
notes. 

326. Act March 3, 1875. Distinctive 

paper for printing notes. 

327. 5173. Plates and dies to be under 

control of the Comptrol- 
ler ; expenses of Cur- 
rency Bureau to be paid 
out of proceeds of taxes, 
or duties, assossed and 
collected on the circula- 
tion of national banking 
asociations. 

5174. Examination of plates and 
dies. 

Act October 5, 1917. I.iinit to 
issue of notes under live 
dollars. 

49 



318. 

319. 

320. 

321. 
322. 

323. 
324. 



82S. 
329. 



50 



OBTAINING AND ISSUING CIRCULATING NOTES. 



330. 5176. Repealed by act July 12, 

1882. 

331. 5177. Repealed by act January 

14, 1875. 

332. Act of January 14, 1875. Aggre- 

gate amount of circulat- 
ing notes not limited. 

333. 5178. Repealed by act January 

14, 1875. 

334. 5179. Repealed by act January 

14, 1875. 

335. 5180. Repealed by act January 

14, 1875. 

336. 5181. Repealed by act January 

14, 1875. 

337. 5182. For what demands na- 

tional-bank notes may. be 
received. 

338. 5183. Issue of post notes, etc., 

prohibited. 

339. 5184. Destroying and replacing 

worn-out and mutilated 
notes. 



340. Act June 23, 1874. Maceration 

of national-bank notes. 

341. 5185. Organization of assocla- 

tion.s to issue gold notes. 

342. 5186. Reserve requirements for 

gold banks. 

343. Act of February 14, 1880. Con- 

version of national gold 
banks into currency 
banks. 

344. 5187. Penalty for issuing circu- 

lating notes to unauthor- 
ized associations. 

345. Act March 4, 1909, section 175, 

formerly section 5188, 
Revi.sed Statutes. Pen- 
alty for imitating bank 
circulation. Use of same 
for advertising purposes, 

346. Act March 4, 1909, section 176, 

formerly section 5189, 
Revised Statutes. Pen- 
alty for mutilating cir- 
culation. 



WHAT ASSOCIATIONS ARE GOYERNED BY PROYISIONS 
OF CHAPTERS TWO, THREE, AND FOUR. 

Sec. 5157. R. s. 300. Sec. 5157. — The provisions of chapters two, three, 
and four ^ of this title, which are expressed without re- 
strictive words, as applying to " national banking associ- 
ations," or to " associations," apply to all associations 
organized to carry on the business of banking under any 
act of Congress. 

Note. — Federal reserve banks are not governed by this act, but 
by the Federal reserve act. 

REGISTERED BONDS INTENDED BY THE TERM " UNITED 
STATES BONDS." 

isef c°°i06' ^^^- ^^^- 5158.— The term "United States bonds," as 
sec. 4 ; 13 Stat,' uscd throughout this chapter, shall be construed to mean 
L., 100. registered bonds of the United States. 



DEPOSIT OF BONDS NOT REQUIRED BEFORE ISSUANCE 
OF CERTIFICATE AUTHORIZING THE COMMENCEMENT 
OF BUSINESS. 

loi.f ?eT' ii- ^^^' ^®°- ■'•'''• — ^^ niuch of the provisions of section 
38 'stat.' L.; fifty-one hundred and fifty-nine of the Revised Statutes 
^Vct .Tune 21, of the United States, and section four of the Act of June 
1917, sec. 9. twentieth, eighteen hundred and seventy-four, and sec- 
tion eight of the Act of July twelfth, eighteen hundred 
and eighty-two, and of any other provisions of existing 
statutes as require that before any national banking 
association shall be authorized to commence banking 
business it shall transfer and deliver to the Treasurer of 
the United States a stated amount of United States 
registered bonds, and so much of those provisions or of 



* Chapters three, four, and five of this compilation. 



OBTAINING AND ISSUING CIRCULATING NOTES. 51 

any other provisions of existing statutes as require any 
national banking association now or hereafter organized 
to maintain a minimum deposit of such bonds with the 
Treasurer is hereby repealed. 

ZloTE. — Section 5159 referred to above is as follows : " Every as- 
Bociation, after having complied with the provisions of this title, 
preliminary to the commencement of the banking business, and 
before it shall be authorized to commence banking business under 
this title, shall transfer and deliver to the Treasurer of the 
United States any United States registered bonds, bearing inter- 
est, to an amount not less than thirty thousand dollars and not 
less than one-third of the capital stock paid in. Such bonds 
shall be received by the Treasurer upon deposit, and shall be 
by him safely kept in his office, until they shall be otherwise 
disposed of, in pursuance of the provisions of this title." (See 
also note under section 5160.) 

TWO PER CENT PANAMA CANAL BONDS HATE ALL 
RIGHTS AND PRIVILEGES ACCORDED TO OTHER TWO 
PER CENT BONDS OF THE UNITED STATES. ACT DE- 
CEMBER 21, 1905. 

303. Sec. 1. — That the two per cent bonds of the United Act Dec. 21, 
States authorized by section eight of the act entitled " An 34^st'at.^ u', 5.' 
act to pro^ade for the construction of a canal connecting 

the waters of the Atlantic and Pacific oceans," approved 
June twenty-eight, nineteen hundred and two, shall have 
all the rights and privileges accorded by law to other two 
per cent bonds of the United States, and every national 
banking association having on deposit, as provided by 
law, such bonds issued under the provisions of said sec- 
tion eight of said act approved June twenty-eight, nine- 
teen hundred and two, to secure its circulating notes, shall 
pay to the Treasurer of the United States, in the months 
of January and July, a tax of one-fourth of one per cent 
each half year upon the average amount of such of its 
notes in circulation as are based upon the deposit of said 
two per cent bonds; and such taxes shall be in lieu of ex- 
isting taxes on its notes in circulation imposed by section 
fifty-two hundred and fourteen of the Revised Statues. 

Note. — Only bonds available as security for national bank circu- 
lation are the consols of 1930 2 per cent Panama Canal bonds, and 
4 per cent bonds of 1925. 

INCREASE OR REDUCTION OF DEPOSIT TO CORRESPOND 
WITH CAPITAL. 

304. Sec. 5160. — [The deposit of bonds made hy each as- Act June :i. 
sociation shall he increased as its capital may he paid uplfc.^' 1%; ^"13 
or increased, so that every associatio^i shall at all time!< stat. l., 104. 
have on deposit with the Treasurer registered United 

States bonds to the amount of at least one-third of its 
capital stock actually paid ?'n]. And any association that 
may desire to reduce its capital or close up its business 
and dissolve its organization, may take up its bonds 
upon returning to the Comptroller its circulating notes 
in the proportion hereinafter required, or may take up 



52 OBTAINING AND ISSUING CmCULATING NOTES. 

any excess of bonds beyond [one-third of its capital 
stock], and upon which no circulating notes have been 
delivered. 

Note. — All provisions of law requiring national banking associa- 
tions to maintain a minimum deposit of bonds were repealed by 
the act of June 21, 1917. See paragraph 302 ante. Prior to the 
passage of that act provisions of sections .5159 and 5160 requiring 
national banks organized prior to December 23, 1913, to deposit 
bonds to an amount not less than $30,000 and not less than one- 
third of the capital stock paid in were held to be modi tied by the 
acts of June 20, 1874, and July 12, 1882. Section 4 of the act of 
June 20, 1874, which follows section 5167, provided in part that the 
amount of bonds on deposit for circulation should not be reduced 
below $.50,000. That fixed the amount of bonds required to be de- 
posited by national banks organized prior to December 23, 1913, 
and having a capital of over $150,000. National banks having a 
capital of $150,000 or less were not required to keep on deposit 
bonds in excess of one-fourth of their capital stock as security 
for their circulating notes by act of July 12, 1882, chapter 290, sec- 
tion 8. This act follows section 5167, Revised Statutes. All na- 
tional banks having a capital of $150,000 or less and organized 
prior to December 23, 1913, were required to keep on deposit bonds 
equal to one-fourth of their capital stock, and if any bank of such 
capitalization organized since December 23, 1913, desired to take 
out circulation it was required to deposit bonds in like amount as 
under the old law. Similarly all banks organized prior to Decem- 
ber 23, 1913, with capital stock of over $150,000 were required to 
keep on deposit bonds equal to $50,000, and any bank of such 
capitalization organized since December 23, 1913, if it desired to 
take out circulation, was required to deposit bonds in that amount. 

Section 18 of the Federal Reserve act provides that after De- 
cember 23, 1915, which is 2 years from the passage of that act, 
and at any time during a period of 20 years thereafter, any mem- 
ber bank desiring to retire the whole or any part of its circulating 
notes, may file with the Treasurer of the United States an appli- 
cation to sell for its account, at par and accrued intei'est, United 
States bonds securing circulation to be retired. This section fur- 
ther provides that the Federal Reserve Board, may, in its dis- 
cretion, require the Federal reserve banks to purchase such bonds 
from the banks whose applications have been tiled with the 
Treasurer at least 10 days before the end of any quarterly period 
at which the Federal Reserve Board may direct the purchase to 
be made : Provided, That Federal reserve banks shall not be 
permitted to purchase an amount to exceed $25,000,000 of such 
bonds in any one year, and which amount shall include bonds 
acquired under section 4 of that act by the Federal reserve bank. 

EXCHANGE OF COUPON FOR REGISTERED BONDS. 

Act June 3, 305. Scc. 5161. — To facilitate a compliance with the 

1864, c. lOfi', two preceding sections, the Secretary of the Treasury is 

s4t.' L., 104. authorized to receive from any association, and cancel, 

any United States coupon bonds, and to issue in lieu 

thereof registered bonds of like amount, bearing a like 

rate of interest, and having the same time to run. 

MANNER OF MAKING TRANSFERS OF BONDS. 

Act June 3. 306. Sec. 5162. — All transfers of United States bonds, 

BPc!^' 19; ^Tsiiade by any association under the provisions of this 

Stat. L., 'i05. title, shall be made to the Treasurer of the United 

States in trust for the association, with a memorandum 

written or printed on each bond, and signed by the 



OBTAINING AND ISSUING CIRCULATING NOTES. 53 

cashier, or some other officer of the association making 
the deposit. A receipt shall be given to the association, 
by the Comptroller of the Currency, or by a clerk ap- 
pointed by him for that purpose, stating that the bond 
is held in trust for the association on whose behalf the 
transfer is made, and as security for the redemption 
and pa3'ment of any circulating notes that have been or 
maj' be delivered to such association. No assignment or 
transfer of any such bond by the Treasurer shall be 
deemed valid unless countersigned by the Comptroller 
of the Currency. 

REGISTRY OF TRANSFERS. 

307. Sec. 5163.— The Comptroller of the Currency shall jgef l^\ol: 
keep in his office a book in which he shall cause to be sees. ' 19-20 ; 13 
entered, immediately upon countersigning it, every ^^^ ^■' ■^®^" 
transfer or assignment by the Treasurer of any bonds 
belonging to a national banking association, presented 

for his signature. He shall state in such entry the name 
of the association from whose accounts the transfer is 
made, the name of the party to whom it is made, and 
the par value of the bonds transferred. 

NOTICE OF TRANSFER TO BE GIVEN TO ASSOCIATION 
INTERESTED. 

308. Sec. 5164.— The Comptroller of the Currency shall, jgf «* June ^3. 
immediately upon countersigning and entering any trans- sec. ' 19 ; li 
fer or assignment by the Treasurer, of any bonds belong- ^ • • **• 
ing to a national banking association, advise by mail the 
association from whose accounts the transfer is made, of 

the kind and numerical designation of the bonds, and the 
amount thereof so transferred. 

EXAMINATION OF REGISTRY AND BONDS. 

309. Sec. 5165.— The Comptroller of the Currency shall ^^Act June^jS, 
have at all times, during office hours, access to the books sec. ' 20": v.l 
of the Treasurer of tbe United States for the purpose of ^^**' ^' •^^^* 
ascertaining the correctness of any transfer or assignment 

of the bonds deposited by an association, presented to the 
Comptroller to countersign; and the Treasurer shall have 
the like access to the book mentioned in section fifty-one 
hundred and sixty-three, during office hours, to ascertair 
the correctness of the entries in the same; and the Comp^ 
troller shall also at all times have access to the bonds on 
deposit with the Treasurer, to ascertain their amount and 
condition. 

ANNUAL EXAMINATION OF BONDS BY ASSOCIATION. 

310. Sec. 5166. — Every association having bonds depos- Act Juno 3, 
ited in the office of the Treasurer of the United States ^^^,?^' 25: ^^n 
shall, once or oftener in each fiscal year, examine and stat. l., iog. 
compare the bonds pledged by the association with the 

books of the Comptroller of the Currency and with the 



54 OBTAINING AND ISSUING CIRCULATING NOTES. 

accounts of the association, and, if they are found correct, 
to execute to the Treasurer a certificate setting forth the 
different kinds and the amounts thereof, and that the 
same are in the possession and custod}^ of the Treasurer 
at the date of the certificate. Such examination shall be 
made at such time or times, during the ordinary business 
hours, as the Treasurer and the Comptroller, respectively, 
may select, and may be made by an officer or agent of 
such association, duly appointed in writing for that pur- 
pose; and his certificate before mentioned shall be of 
like force and validity as if executed by the president or 
cashier. A duplicate of such certificate, signed by the 
Treasurer, shall be retained by the association. 

GENERAL PROVISIONS RESPECTING BONDS. 

Act June 3, 311. Sec. 5167. — The bonds transferred to and deposited 
sec^^' 26: ^^i1^ ^vith the Treasurer of the United States, by any asso- 
btat. L., io7. ciution, for the security of its circulating notes, shall be 
held exclusively for that purpose, until such notes are 
redeemed, except as provided in this title. The Comp- 
troller of the Currency shall give to any such association 
powers of attorney to receive and appropriate to its own 
use the interest on the bonds which it has so transferred 
to the Treasurer; but such powers shall become inopera- 
tive whenever such association fails to redeem its circu- 
lating notes. Whenever the market or cash value of any 
bonds thus deposited with the Treasurer is reduced below 
the amount of the circulation issued for the same, the 
Comptroller may demand and receive the amount of such 
depreciation in other United States bonds at cash value, 
or in money, from the association, to be deposited with 
the Treasurer as long as such depreciation continues. 
And the Comptroller, upon the terms prescribed by the 
Secretary of the Treasury, may permit an exchange to be 
made of any of the bonds deposited with the Treasurer 
by any association, for other bonds of the United States 
authorized to be received as security for circulating notes, 
if he is of opinion that such an exchange can be made 
without prejudice to the United States; and he may 
direct the return of any bonds to the association which 
transferred the same, in sums of not less than one thou- 
sand dollars, upon the surrender to him and the cancella- 
tion of a proportionate amount of such circulating notes: 
Provided, That the remaining bonds which shall have 
been transferred by the association offering to surrender 
circulating notes are equal to the amount required for the 
circulating notes not surrendered bj' such association, and 
that the amount of bonds in the hands of the Treasurer is 
not diminished below the amount required to be kept on 
deposit Avith him, and that there has been no failure by 
the association to redeem its circulating notes, nor any 
other violation by it of the provisions of this title, and 



OBTAINING AND ISSUING CIRCULATING NOTES. 65 

that the market or cash value of the remaining bonds is 
not below the amount required for the circulation issued 
for the same. 

Note. — All provisions of law requiring national Danking asso- 
ciations to maintain a minimum deposit of bonds were repealed by 
the act of June 21, 1917. See paragraph 302, ante. 

WITHDRAWAL OF CIRCULATING NOTES ON DEPOSIT OF 
LAWFUL MONEY AND WITHDRAWAL OF BONDS. ACT 
JUNE 20, 1874. 

312. Sec. 4. — That any association organized under this ^ct June 20, 
act, or any of the acts of "vvhich this is an amendment, sec. 4 : is stat! 
desiring to withdraw its circulating notes, in whole or in ^" ^^^' 
part, may, upon the dep£>sit of lawful money with the 
Treasurer of the United States in sums of not less than 

nine thousand dollars, take up the bonds which said asso- 
ciation has on deposit with the Treasurer for the security 
of such circulating notes; which bonds shall be assigned 
to the bank in the manner specified in the nineteenth sec- 
tion of the national-bank act ; and the outstanding notes 
of said association, to an amount equal to the legal-tender 
notes deposited, shall be redeemed at the Treasury of the 
United States, and destroyed as now provided by law: 
Provided., That the amount of the bonds on deposit for 
circulation shall not be reduced below fifty thousand 
dollars. 

Note. — Other sections of this act referred to under paragraphs 
401 and 402, post. Section 19 of the national-bank act is incor- 
porated in Revised Statutes, sections 5162-5164. See also note 
■under section 5160, paragraph 304, ante. 

AMOUNT OF BONDS REQUIRED TO BE ON DEPOSIT: RE- 
DUCTION OF A3I0UNT OR RETIREMENT IN FULL OP 
CIRCULATING NOTES. ACT JULY 12, 1882. 

313. Sec. 8. — That national banks now organized {or Act July 12. 
herafter organized) , having a capital of one hundred l^p^ . ^2 g'ta? 
and fifty thousand dollars, or less, shall not be required l., 164." 

to keep on deposit or deposit with the Treasurer of the 
United States United States bonds in excess of one- 
fourth of their capital stock as security for their circu- 
lating notes; but such banks sliall keep on deposit or 
deposit with the Treasurer of the United States the 
amount of bonds as herein required. And such of those 
banks having on deposit bonds in excess of that amount 
are autliorized to reduce their circulation by the deposit 
of lawful money as provided by law ; [provided That the 
amount of such circulating notes shall not in any case 
exceed ninety per centum of the par value of the bonds 
deposited as herein provided:'] Provided furth^r^ That 
the national banks which shall hereafter make deposits 
of lawful money for the retirement in full of their circu- 
lation shall at the time of their deposit be assessed for 
the cost of transporting and redeeming their notes then 
outstanding, a sum equal to tht; average cost of the re- 



56 OBTAINING AND ISSUING CIRCULATING NOTES. 

demption of national-bank notes during the preceding 
3'ear, and shall thereupon pay such assessment. And 
all national banks which have heretofore made or shall 
hereafter make deposits of lawful money for the reduc- 
tion of their circulation shall be assessed and shall pay 
an assessment in the manner specified in section three of 
the act approved June 20, 1874, for the cost of transport- 
ing and redeeming their notes redeemed from such de- 
posits subsequently to June 30, 1881. 

Note. — The limitation of the circulation not to exceed ninety 
per cent of the bonds deposited is superseded by act March 14, 
1900, which follows Revised Statutes 5171. For act .Tune 20, 1874, 
section 3, mentioned in this section, see paragraph 414, post. 

All provisions of law requiring national banking associations to 
maintain a minimum deposit of bonds were repealed by the act of 
June 21, 1917, paragraph 302, ante. 

LIMITATION ON WITHDRAWAL OF BONDS— CONSENT OP 
C03IPTR0LLER OF CURRENCY AND SECRETARY OF THE 
TREASURY NECESSARY. 

1882* ^c"'^29o' ^^^- ^^°- ^- — That any national banking association 
Bee. 9 ; 22 Stat now Organized, or hereafter organized, desiring to with- 
'Act Mar. 4, clraw its circulating notes, upon a deposit of lawful 
34*^^ ^tat.'^' L'^^oney with the Treasurer of the United States, as pro- 
1290. * ■' vided in section four of the act of June twentieth, eigh- 
teen hundred and seventy-four, or as provided in this 
act, is authorized to deposit lawful money and, with the 
consent of the Comptroller of the Currency and the 
approval of the Secretary of the Treasury, withdraw a 
proportionate amount of the bonds held as security for 
its circulating notes in the order of such deposits: Pro- 
vided, That not more than nine millions of dollars of 
lawful money shall be deposited during any calendar 
month for this purpose : A?id provided further, That the 
provisions of this section shall not apply to bonds called 
for redemption by the Secretary of the Treasury, nor to 
withdrawal of circulating notes in consequence thereof. 

REFUNDING OF BONDS UNDER THE FEDERAL RESERYE 
ACT; RETIREMENT OF CIRCULATING NOTES. 

lots*' s^c*^' 1^8^' ^^^* ^^^' ^^" — -^f ter two years from the passage of this 
38 Stat.' L.', act, and at any time during a period of twenty years 
thereafter, any member bank desiring to retire the whole 
or any part of its circulating notes, may file with the 
Treasurer of thf» United States an application to sell for 
its account, at par and accrued interest. United States 
bonds securing circulation to be retired. 

PURCHASE OF UNITED STATES BONDS BY FEDERAL 
RESERYE BANKS. 

j^Act Dec. 23, 316. The Treasurer shall, at the end of each quarterly 
38 "'st'at.' L.; period, furnish the Federal Reserve Board with a list of 
^^^" such applications, and the Federal Reserve Board may, 

in its discretion, require the Federal reserve banks to pur- 
chase such bonds from the banks whose applications have 



OBTAINING AND ISSUING CIRCULATING NOTES. 57 

been filed with the Treasurer at least ten days before the 
end of any quarterly period at which the Federal Reserve 
Board may direct the purchase to be made: Provided^ 
That Federal reserve banks shall not be permitted to pur- 
chase an amount to exceed $25,000,000 of such bonds in 
any one j^ear, and which amovmt shall include bonds ac- 
quired under section four of this act by the Federal 
reserve bank. 

Provided further^ That the Federal Reserve Board 
shall allot to each Federal reserve bank such proportion 
of such bonds as the capital and surplus of such bank 
shall bear to the aggregate capital and surplus of all the 
Federal reserve banks. 

Upon notice from the Treasurer of the amount of bonds 
so sold for its account, each member bank shall duly 
assign and transfer, in writing, such bonds to the Federal 
reserve bank purchasing the same, and such Federal re- 
serve bank shall, thereupon, deposit lawful money with 
the Treasurer of the United States for the purchase price 
of such bonds, and the Treasurer shall pay to the member 
banks selling such bonds any balance due after deducting 
a sufficient sum to redeem its outstanding notes secured 
by such bonds, which notes shall be canceled and perma- 
nently retired when redeemed. 

ISSUE OF CIECULATING NOTES TO FEDEKAL KESERYE 
BANKS ON SECURITY OF UNITED STATES BONDS; 
CIRCULATING NOTES SO ISSUED OBLIGATIONS OF 
FEDERAL RESERYE BANK. 

317. The Federal reserve banks purchasing such bonds Act Dec. 23. 
shall be permitted to take out an amount of circulating 3s 'sut.' L.i 
notes equal to the par value of such bonds. ^69. 

Upon the deposit with the Treasurer of the United 
States of bonds so purchased, or any bonds with the cir- 
culating privilege acquired under section four of this act, 
any Federal reserve bank making such deposit in the 
manner provided by existing law, shall be entitled to 
receive from the Comptroller of the Currency circulating 
notes in blank, registered and countersigned as provided 
by law, equal in amoimt to the par value of the bonds so 
deposited. Such notes shall be the obligations of thp 
Federal reserve bank procuring the same, and shall be in 
form prescribed by the Secretary of the Treasury, and to 
the same tenor and effect as national bank notes now pro- 
vided by law. They shall be issued and redeemed under 
the same terms and conditions as national bank notes, 
except that tliey shall not be limited to the amount of the 
capital stock of the Federal reserve bank issuing them. 

ISSUE OF TREASURY GOLD NOTES OF THE UNITED 
STATES IN EXCHANGE FOR CERTAIN UNITED STATES 
BONDS. 

318. Upon application of any Federal reserve bank, ap- Act Dec. 23, 
proved by the Federal Reserve Board, the Secretary ofsl^^suT ^l.! 
the Treasury may issue, in exchange for United States ^69. 



58 OBTAINING AND ISSUING CIRCULATING NOTES. 

two per centum gold bonds bearing the circulation privi- 
lege, but against which no circulation is outstanding, one- 
year gold notes of the United States without the circula- 
tion privilege, to an amount not to exceed one-half of 
the two per centum bonds so tendered for exchange, and 
thirty-year three per centum gold bonds without the cir- 
culation privilege for the remainder of the two per cen- 
tum bonds so tendered : Provided, That at the time of 
such exchange the Federal reserve bank obtaining such 
one-year gold notes shall enter into an obligation with 
the Secretary of the Treasury binding itself to purchase 
from the United States for gold at the maturity of such 
one-year notes, an amount equal to those delivered in ex- 
change for such bonds, if so requested by the Secretary, 
and at each maturity of one-year notes so purchased by 
such Federal reserve bank, to purchase from the United 
States such an amount of one-year notes as the Secretary 
may tender to such bank, not to exceed the amount issued 
to such bank in the first instance, in exchange for the 
two per centum United States gold bonds; said obliga- 
tion to purchase at maturity such notes shall continue 
in force for a period not to exceed thirty years. 

For the purpose of making the exchange herein pro- 
vided for, the Secretary of the Treasury is authorized 
to issue at par Treasury notes in coupon or registered 
form as he may prescribe in denominations of one hun- 
dred dollars, or any multiple thereof, bearing interest 
at the rate of three per centum per annum, payable 
quartcrh', such Treasury notes to be payable not more 
than one year from the date of their issue in gold coin of 
the present standard value, and to be exempt as to prin- 
cipal and interest from the payment of all taxes and 
duties of the United States except as provided by this 
act, as well as from taxes in any form by or under State, 
municipal, or local authorities. And for the same pur- 
pose, the Secretary is authorized and empowered to issue 
United States gold bonds at par, bearing three per centum 
interest payable thirty years from date of issue, such 
bonds to be of the same general tenor and effect and to be 
issued under the same general terms and conditions as 
the United States three per centum bonds without the 
circulation privilege now issued and outstanding. 

Upon application of any Federal reserve bank, ap- 
proved by the Federal Reserve Board, the Secretary may 
issue at par such three per centum bonds in exchange for 
the one-year gold notes herein provided for. 

Act Tune .3 COMPTROLLER TO DETERMINE IF ASSOCIATION CAN 

1864, c. iog! commence business. 

eec. 17 ; 13 

Biat. L., 104. gj^g g^^ 5168. — Whenever a certificate is transmitted 
to the Comptroller of the Currency, as provided in this 
title, and the association transmitting the same notifies 
the Comptroller that at least fifty per centum of its capi- 



OBTAINING AND ISSUING CIRCULATING NOTES. 59 

tal stock has been duly paid in, and that siu-h association 
has complied with all the provisions of this title required 
to be complied with before an association shall be author- 
ized to commence the business of banking, the Comp- 
troller shall examine into the condition of such associa- 
tion, ascertain especially the amount of money paid in on 
account of its capital, the name and place of residence of 
each of its directors, and the amount of the capital stock 
of which each is the owner in good faith, and generally 
whether such association has complied with all the pro- 
visions of this title required to entitle it to engage in 
the business of banking; and shall cause to be made and 
attested by the oaths of a majority of the directors, and 
by the president or cashier of the association, a statement 
of all the facts necessary to enable the Comptroller to 
determine whether the association is lawfully entitled to 
commence the business of banking. 

CERTIFICATE OF AUTHORITY TO COMMENCE BANKING 
TO BE ISSUED. 

320. Sec. 5169.— If, upon a careful examination of the Act June 3. 
facts so reported, and of any other facts which may come s^^cls^'io^iy 1*^1^^ 
to the knowledge of the Comptroller, whether by means of ^tat. l., 102, 
a special commisison appointed by him for the purpose of 
inquiring into the condition of such association, or other- 
wise, it appears that such association is lawfully entitled 

to commence the business of banking, the Comptroller 
shall give to such association a certificate, under his hand 
and official seal, that such association has comi^lied with 
all the provisions required to be complied with before 
commencing the business of banking, and that such asso- 
ciation is authorized to commence such business. But the 
Comptroller may withhold from an association his cer- 
tificate authorizing the commencement of business, when- 
ever he has reason to suppose that the shareholders have 
formed the same for any other than the legitimate ob- 
jects contemplated by this title. 

PUBLICATION OF CERTIFICATE. 

321. Sec. 5170. — The association shall cause the certifi- Act Jnno .3, 
cate issued under the preceding section to be published ingf^^^' i%. '"/^j 
some ncAvspaper printed in the city or county where thestat. l., 104. 
association is located, for at least sixty days next after 

the issuing thereof; or, if no newspaper is published in 
such city or county, then in the newspaper published 
nearest thereto. 

322. Sec. 5171.— 

This section was originally section 21 of the act of .Tune 3, 1804. • 

It was amended by the act of Marcli 3. ISl!;"). and was later in- 
corporated in the Revised Statutes as section 5171. This section 



GU OBTAINING AND ISSUING CIRCULATING NOTES. 

was repealed by the act of July 12, 1882, and the repealing section 
was superseded by section 12 of the act of March 14, 1900, which 
follows : 

DELIVERY OF CIRCULATING NOTES. ACT OF MARCH 14, 
1900. AS AMENDED OCTOBER 5, 1917. 

Act Mar. 14, 323. Scc. 12. — That upon the deposit with the Treasurer 
i^^^sf 'stat.^i!!', o^ ^^^® United States, by any national banlving association, 
1^: act Oct. 5,' of any bonds of the United States in the manner provided 
be existing hxw, such association shall be entitled to re- 
ceive from the Comptroller of the Currency circulating 
notes in blank, registered and countersigned as provided 
by law, equal in amount to the par value of the bonds so 
deposited; and any national banking associations now 
having bonds on deposit for the security of circulating 
notes, and upon Avhich an amount of circulating notes has 
been issued less than the par value of the bonds, shall be 
entitled, upon due application to the Comptroller of the 
Currency, to receive additional circulating notes in blank 
to an amount which will increase the circulating notes 
held by such association to the par value of the bonds 
deposited, such additional notes to be held and treated 
in the same way as circulating notes of national banking 
associations heretofore issued, and subject to all the pro- 
visions of law affecting such notes: Provided^ That 
nothing herein contained shall be construed to modify or 
repeal the provision of section fifty-one hundred and 
sixty-seven of the Revised Statutes of the United States, 
authorizing the Comptroller of the Carrency to require 
additional deposits of bonds or of lawful money in case 
the market value of the bonds held to secure the circulat- 
ing notes shall fall below the par value of the circulat- 
ing notes outstanding for which such bonds may be de- 
posited as security : And provided furthei\ That the cir- 
culating notes furnished to national banking associations 
under the provisions of this act shall be of the denomina- 
tions prescribed by law : And provided further^ That the 
total amount of such notes issued to any such associa- 
tion may equal at any time but shall not exceed the 
amount at such time of its capital stock actually paid in : 
And provided further^ That under regulations to be 
prescribed by the Secretary of the Treasury any national 
banking association may substitute the two per centum 
bonds issued under the provisions of this act for any of 
the bonds deposited with the Treasurer to secure circula- 
tion or to secure deposits of public money ; and so much 
of an act entitled " An act to enable national banking 
associations to extend their corporate existence, and 
for other purposes," approved July twelfth, eighteen 
hundred and eighty-tw^o, as prohibits any national bank 
which makes any deposit of lawful money in order to 
withdraw its circulating notes from receiving any in- 
crease of its circulation for the period of six months 
from the time it made such deposit of lawful money for 



OBTAINING AND ISSUING CTKCULATING NOTES. 61 

the purpose aforesaid, is hereby repealed, and all other 
acts or parts of acts inconsistent with the provisions of 
this section are hereby repealed. 

PRINTING DENOMINATIONS AND FORM OF THE CIRCU- 
LATING NOTES. 

324. Sec. 5172. — That in order to furnish suitable notes Act June 3, 
for circulation, the Comptroller of the Currency shall, sec. ' 22; ^ li 
under the direction of the Secretary of the Treasury, ^*A*ct^Mir^.^'3, 
cause plates and dies to be enaraved, in the best manner i^i^- 

to guard against counterfeiting and fraudulent altera- 
tions, and shall have printed therefrom and numbered 
such quantity of circulating notes in blank, or bearing 
engraved signatures of officers as herein provided, of the 
denominations of $1, $2, $5, $10, $20, $50, $100, $500, and 
$1,000, as may be required to supply the associations en- 
titled to receive the same. Such notes shall express upon 
their face that they are secured by United States bonds 
deposited with the Treasurer of the United States, by the 
yrritten or engraved signatures of the Treasurer and Reg- 
ister, and by the imprint of the seal of the Treasury ; and 
shall also express upon their face the promise of the as- 
sociation receiving the same to pay on demand, attested 
by the written or engraved signatures of the president or 
vice president and cashier; and shall bear such devices 
and such other statements and shall be in such form as the 
Secretary of the Treasury shall, by regulation, direct. 

CHARTER NUMBER TO BE PRINTED ON NOTES. ACT 
JUNE 20, 1874. 

325. Sec. 5. — That the Comptroller of the Currency Act June 20, 
shall, under such rules and regulations as the Secretary ISS -. is i& 
of the Treasury may prescribe, cause the charter numbers ^^ ^2'*- 

of the association to be printed upon all national-bank 
notes which may be hereafter issued by him. 

Note. — Other sections of this act will be found in note under 
paragraphs 401 and 402, post. 

DISTINCTITE PAPER FOR PRINTING NOTES. ACT MARCH 
3, 1875. 

326. Sec. 1. — * * * That the national-bank notes Act Mar. 3, 
shall be printed under the direction of the Secretary of Lc.^i : is itft 
the Treasury, and upon the distinctive or special paper ^rV lilu'bnr' 
which has been, or may hereafter be, adopted by him for 
printing United States notes. 

PLATES AND DIES TO BE UNDER THE CONTROL OF THE 

COMPTROLLER. EXPENSES OF CURRENCY BUREVU 

TO BE PAID OUT OF PROCEEDS OF TAXES, OR DUTIES, 

ASSESSED AND COLLECTED ON THE CIRCULATION OF 

NATIONAL BANKING ASSOCIATIONS. 

327. Sec. 5173. — The plates and special dies to be pro- a^"* •^""% ^,' 
cured by the Comptroller of the Currency for ihe print- soc ' 4T: d 
ing of such circulating notes shall remain under his con- ^^^*- ^" ^^^- 



02 OBTAINING AND ISSUING CIKCULATING NOTES. 

trol and direction, and the expenses necessarily incurred 
in executing the laws respecting the procuring of such 
notes, and all other expenses of the Bureau of the Cur- 
rency, shall be paid out of the proceeds of the taxes or 
duties assessed and collected on the circulation of national 
banking associations under this title. 

Note. — See act June 20, 1874, paragraph 414, post, and act July 
12, 1882, paragraph 220, ante, requiring banks to pay cost of their 
plates. On April 30, 1914, at the request of the Comptroller of the 
Currency, the Secretary of the Treasury designated the Director 
of Bureau of Engraving and Printing as custodian of the dies, 
rolls, and plates, etc., used for the printing of circulating notes of 
the Federal reserve and national banks. 

EXAMINATION OF PLATES AND DIES. 

.\ct Mar. 3. 328. Sec. 5174 [as amended 1877]. — The Comptroller of 
l^c."\ ; 17 s"ta.l' the Currency shall cause to be examined, each year, the 
''■\ct^^E^eb 27 pl^^es, dics, bed pieces, and other material from which the 
1 STT, c. 69j 19 national-bank circulation is printed, in whole or in part, 
Stat. L., 2o2. ^^^ gj^ ^^ l^^g office annually a correct list of the same. 

Such material as shall have been used in the printing of 
the notes of associations which are in liquidation, or have 
closed business, shall be destroyed, under such regulations 
as shall be prescribed by the Comptroller of the Currency 
and approved by the Secretary of the Treasury. The ex- 
penses of any such examination or destruction shall be 
paid out of any appropriation made b}^ Congress for the 
special examination of national banks and bank-note 
plates. 

LIMIT TO ISSUE OF NOTES UNDER FIVE DOLLARS. 

.Act Oct. 5, 329. Sec. 3. That from and after the passage of this 
'*^^^* Act any national banking association, upon compliance 

with the provisions of law applicable thereto, shall be en- 
titled to receive from the Comptroller of the Currency, 
or to issue or reissue, or place in circulation notes in 
denominations of $1, $2, $.5, $10, $20, $50, and $100 in 
such proportion as to each of said denominations as the 
bank may elect: Provided^ however^ That no bank shall 
receive or have in circulation at any one time more than 
$25,000 in notes of the denominations of $1 and $2. 

Note.— Section 5175, Revised Statutes, providing that not more 
than one-sixth part of the notes furnished to any association 
should be of a less denomination than .$5 was repealed by section 
2 of the act of October 5, 1917. Section 5172, Revised Statutes, 
as amended March 3. 1919, authorizes the issuance of notes of the 
denomination of $500 and $1,000. 

330. Sec. 5176.— 

Repealed by act July 12, 1882, which in turn was superseded by 
act March 14, 1900. (See section 5171.) 

331. Sec. 5177.— 

Repealed by act .lanuary 14, 1875. 



OBTAINING AND ISSUING CIRCULATING NOTES. 63 

AGGREGATE AMOUNT OF CIRCULATING NOTES NOT LIM- 
ITED. ACT JANUARY 14, 1875. 

332. Sec. 3.— That section 5177 of the Revised Statutes, ^Act^jan.^H. 
of the United States, limiting the aggregate amount of ;;: ^8 stat. L.i 
circulating notes of national banking associations, be and " 

is hereby, repealed ; and each existing banking association 
may increase its circulating notes in accordance with ex- 
existing law without respect to said aggregate limit; and 
new banking associations may be organized in accord- 
ance with existing law without respect to said aggregate 
limit; and the provisions of law for the withdrawal and 
redistribution of national bank currency among the sev- 
eral States and Territories are hereby repealed. 

333. Sec. 5178.— 

Repealed by act January 14, 1875. 

334. Sec. 5179.— 

Repealed by act January 14, 1875. 

335. Sec. 5180.— 

Repealed by act January 14, 1875. 

336. Sec. 5181.— 

Repealed by act January 14, 1875. 

FOR WHAT DEMANDS NATIONAL-BANK NOTES MAY BE 
RECEIYED. 

337. Sec. 5182 [as amended 1919].— Any association re- ^g^^f ^ -^^^ ^^^ 
ceiving circulating notes under this title may, if its prom- 
ise to pay such notes on demand is expressed thereon at- 
tested by the written or engraved signatures of the presi- 
dent or vice president and the cashier thereof in such 

manner as to make them obligatory promissory notes pay- 
able on demand at its place of business, issue, and circu- 
late the same as money. Such written or engraved signa- 
tures of the president or vice president and the cashier of 
such association may be attached to such notes either be- 
fore or after the receipt of such notes by such association. 
And such notes shall be received at par in all parts of the 
United States in payment of taxes, excises, public lands, 
and all other dues to the United States, except duties on 
imports ; and also for all salaries and other debts and de- 
mands owing by the United States to individuals, cor- 
porations, and associations within the United States, ex- 
cept interest on the public debt, and in redemption of the 
national currency. 

ISSUE OF POST NOTES, ETC., PROHIBITED. 

338. Sec. 5183 [as amended 1875].— No national banking jswf J'^'no.! 
association shall issue post notes or any other notes to|<|^^j j-^j,,,.^-^ 
circulate as monev than such as are authorized by the Act 'fcu. 'is 
provisions of this" Title. y^^; /;;;T:ji./*' 



64 OBTAINING AND ISSUING CIRCULATING NOTES. 

DESTROYING AND REPLACING WORN-OUT AND MUTI- 
LATED NOTES. 

ififtf* *^"°®i J' 339. Sec. 5184.— It shall be the duty of the Comptroller 

1864, c. 106. J. ,, ^ , • •', .-1 i 1 • 

sec. 24; 13 01 the Currency to receive worn-out or mutilated cir- 
stat. L., 106. cuiating notes issued by any banking association, and 
also, on due proof of the destruction of any such circulat- 
ing notes, to deliver in place thereof to the association 
other blank circulating notes to an equal amount. Such 
"worn-out or mutilated notes, after a memorandum has 
been entered in the proper books, in accordance with such 
regulations as may be established by the Comptroller, as 
well as all circulating notes which shall have been paid or 
surrendered to be canceled [^shall he humed to ashes'] in 
presence of four persons, one to be appointed by the Sec- 
retary of the Treasury, one by the Comptroller of the 
Currency, one by the Treasurer of the United States, and 
one by the association, under such regulations as the Sec- 
retary of the Treasury may prescribe. A certificate of 
l^such burning'] signed by the parties so appointed, shall 
be made in the books of the Comptroller, and a duplicate 
thei-eof forwarded to the association whose notes are thus 
canceled. 

Note.— Act June 23, 1874, provides for maceration in place of 
burning. 

MACERATION OF NATIONAL-BANK NOTES. ACT JUNE 
23, 1874. 

sund?^d'vu a**^ ^^^' * * * For the maceration of national bank 
propriation act notes * * * • an(j that all such issues hereafter de- 
c." 455",^sec^^i ; stroyed may be destroyed by maceration instead of burn- 
18 Stat. L , 206. j^g to ashcs, as now provided by law; and that so much 
of sections twenty-four and forty-three of the national 
currency act as requires national bank notes to be burned 
to ashes is hereby repealed ; that the pulp from such mac- 
erated issue shall be disposed of only under the direction 
of the Secretary of the Treasury. 

ORGANIZATION OF ASSOCIATIONS TO ISSUE GOLD 
NOTES. 

1870* '^c"'''282: 341. Sec. 5185 [as amended 1875].— Associations may be 

sec.^^ ; 16 Stat! organized in the manner prescribed by this Title for the 

"A-ct Jan. 19, purpose of issuing notes payable in gold ; and upon the 

18^^'stat. ■^L ! deposit of any United States bonds bearing interest pay- 

302. able in gold with the Treasurer of the United States, in 

the manner prescribed for other associations, it shall be 

lawful for the Comptroller of the Currency to issue to 

the association making the deposit circulating notes of 

different denominations, but none of thein less than 

five dollars, and not exceeding in amount eighty per 

centum of the par value of the bonds deposited, which 

shall express the promise of the association to pay them, 

upon presentation at the ofTicc at which they arc issued, in 

gold coin of the United States, and shall be so redeemable. 



OBTAINING AND ISSUING CIRCULATING NOTES. 65 

[But no such association shall have a circulation of more 
than one million of dollars.) 

Note. — The limitation of circulation of banking associations is- 
suing notes payable in gold was repealed by the act of January 
19, 1875. 

RESERYE REQUIREMENTS FOR GOLD BANKS. 

342. Sec. 5186. — Every a&sociation organized under the^g^^* "^c"'^282' 
preceding section shall at all times keep on hand not less sees.' 3-5; le 
than twenty-five per centum of its outstanding circula- 253!' ^" ^^^' 
tion, in gold or silver coin of the United States; and shall 

receive at par in the payment of debts the gold notes of 
every other such association which at the time of such 
payment is redeeming its circulating notes in gold coin 
of the United States, and shall be subject to all the pro- 
visions of this Title: Provided., That, in applying the 
same to associations organized for issuing gold notes, the 
terms " lawful money " and " lawful money of the United 
States " shall be construed to mean gold or silver coin of 
the United States ; and the circulation of such association 
shall not be wathin the limitation of circulation men- 
tioned in this Title. 

CONVERSION OF NATIONAL GOLD BANKS INTO CUR- 
RENCY BANKS. ACT FEBRUARY 14, 1880. 

343. That any national gold bank organized under the Act Feb. 14. 
provisions of the laws of the United States, may, in the yf|^' ^ -^^ ^^ 
manner and subject to the provisions prescribed by sec- 
tion fifty-one hundred and fifty-four of the Eevised Stat- 
utes of the United States, for the conversion of banks in- 
corporated under the laws of any State, c^ase to be a gold 

bank, and become such an association as is authorized by 
section fifty-one hundred and thirty-three, for carrying 
on the business of banking, and shall have the same powd- 
ers and privileges, and shall be subject to the same duties, 
responsibilities, and rules, in all respects, as are bj' law 
prescribed for such associations: Provided.^ That all 
certificates of organization which shall be issued under 
this act shall bear the date of the original organization of 
each bank respectively as a gold bank. 

PENALTY FOR ISSUING CIRCULATING NOTES TO UNAU- 
THORIZED ASSOCIATIONS. 

344. Sec. 5187. — No officer acting under the provisions Act June 3, 
of this title shall countersign or deliver to any associa- g^^^' 27 ; ^^\i 
tion, or to any other company or person, any circulating ^'at- l., 107. 
notes contemplated by this title, except in accordance 

with the true intent and meaning of its provisions. 
Every officer who violates this section shall be deemed 
guilty of a high misdemeanor, and shall be fined not more 
than double the amount so countersigned and delivered, 
and imprisoned not less than one year and not more than 
fifteen years. 

164312°— 20 5 



66 OBTAINING AND ISSUING CIRCULATING NOTES. 

PENALTY FOR IMITATING BANK CIRCULATION. USE OF 
SAME FOR ADYERTISING PURPOSES. 

Act Mar 4, 345, Sec. 5188. — Superseded by section 175 of the act 

1909, c. 321, <; Tvr 1 , -1 ann 

sec. 175 ; 35 01 March 4, 1909. 

^^his^'sectfon SECTION 175. It shall not be lawful to design, engrave, 

originally en ])rint, OF in any manner make or execute, or to utter, 

acted Feb. o, f Tj.-ii.-ij. u- 

1867. issue, distribute, circulate, or use any business or pro- 

fessional card, notice, placard, circular, hand-bill, or ad- 
vertisement in the likeness or similitude of any circulat- 
ing note or other obligation or security of any banking 
association organized or acting under the laws of the 
United States which has been or may be issued under 
any act of Congress, or to write, print, or otherwise 
impress upon any such note, obligation, or security, any 
business or professional card, notice or advertisement, or 
any notice or advertisement of any matter or thing what- 
ever. Whoever shall violate any provision of this sec- 
tion shall be fined not more than one hundred dollars, 
or imprisoned not more than six months, or both. 

PENALTY FOR MUTILATING CIRCULATION. 

1909* ^'""bi" ^^^- ^^^- 5189.— Superseded by section 176 of the act 
Bee. ' 176 ; 3^ of March 4, 1909. 

^^Tiii^'sectfo^n Section 176. Whocver shall mutilate, cut, deface, dis- 
Tnacte^d'^' juni ^S^^i'^5 or perforate with holes, or unite or cement to- 
3, 1864. gether, or do any other thing to any bank bill, draft, 

note, or other evidence of debt, issued by any national 
banking association, or shall cause or procure, the same 
to be done, with intent to render such bank oill, draft, 
note, or other evidence of debt unfit to be reissued by 
said association, shall be fined not more than one hundred 
dollars, or imprisoned not more than six months, or both. 



REGULATION OF THE BANKING BUSINESS. 



fi7 



CHAPTER IV. 



REGULATION OF THE BANKING BUSINESS. 



400. 5190. Place of business. 

401. Central reserve cities. — Explana- 

tory note. 

402. Reserve cities. — Explanatory note. 

403. Act Dec. 23, 1913, as amended. 

Demand and time depos- 
its defined. 

404. Act Dec. 23, 1913, as amended. 

Reserve requirements — 
when effective. 

405. Act Dec. 23, 1913, as amended. 

Reserve requirements for 
banks not in reserve cities. 

406. Act Dec. 23, 1913, as amended. 

Reserve requirements for 
banks in reserve cities. 

407. Act Dec. 23, 1913, as amended. 

Reserve requirements for 
banks in central reserve 
cities. 

408. Act Dec. 23, 1913, as amended. 

Member bank forbidden to 
keep on deposit with non- 
member bank a sum in 
excess of 10 per cent of its 
own capital and surplus 
or to secure discounts for 
nonmember bank. 

409. Act Dec. 23, 1913, as amended. 

Withdrawal of reserve by 
member bank. 

410. Act Dec. 23, 1913, as amended. 

Reserve requirements — 
how estimated. 

411. Act Dec. 23, 1913, as amended. 

Reserve requirements for 
national banks located in 
Alaska or outside the con- 
tinental United States. 

412. Act December 23, 1913. Redemp- 

tion fund not counted as 
reserve. 

413. No reserve required to be held 

again.st United States do 
posits. 

414. Act June 20, 1874. Provisions for 

redeeming circulation. 
Five per cent redemption 
fund. 

415. Act March 3, 1875. Clerical force 

for redemption of circu- 
lating notes. 

416. Act July 14, 1890. Disposition of 

redemption account. 

417. Act July 28, 1892. Redemption of 

lost or stolen notes and of 
notes not properly signed. 



418. 5193. Repealed by act March 14, 

1900. 

419. 5194. Superseded by repeal of sec- 

tion 5193. 

420. 5195. Place for redemption of cir- 

culating notes to be desig- 
nated. 

421. 5196. National banks to take notes 

of other national banks 
at par. 

422. 5197. Limitation upon rate of in- 

terest which may be 
taken. 

423. 5198. Penalty for taking unlawful 

interest. Jurisdiction of 
suits by or against na- 
tional banks. 

424. 5199. Dividends. 

425. 5200. Limitation of liabilities 

which may be incurred by 
any one person, company, 
etc. 

426. 5201. Associations must not loan 

on or purcha.se their own 
stock. 



427. 
428. 
429. 



5202. 



5203. 
5204. 



5206. 
5207. 



Restriction on bank's in- 
debtedness. 

Restriction upon use of cir- 
culating notes. 

Prohibition upon w i t h- 
drawal of capital. Un- 
earned dividends pro- 
hibited. 
430. 5205. Assessment for failure to 
pay up capital stock or for 
impairment of capital. 

Prohibition against uncur- 
rent notes. 

United States notes not to 
be held as collateral. 
Act July 12, 1882. Issue of gold 

certificates. 
520S. Penalty for faLsely certify- 
ing checks. 
Act July 12, 1882. Punishment 
for falsely certifying 
checks. 

Penalty for embezzlement, 
abstraction, willful mis- 
application, false entries, 
etc. 
437. Act January 26, 1907. National 
banks not permitted to 
make contributions in con- 
nection with election to 
political office. 

69 



431 
432, 
433, 
434, 
435. 

430. 5209. 



70 



REGULATION OF THE BANKIXG BUSINESS. 



438a. Member bank can not make loan 
or grant a gratuity to any 
national bank examiner. 

438b. National bank examiner can not 
perform any services for 
compensation for any 
bank or officer. Exam- 
iner can not disclose the 
names of borrowers or 
collateral without first ob- 
taining written consent of 
Comptroller. 

438c. Penalty for officer, director, or 
employee of member bank 
who receives any commis- 
sion or gift in connection 
with any loan. 

438d. Purchase of securities or prop- 
erty from one of its di- 
rectors, or sales to a di- 
rector by a member bank. 

438e. Rate of interest paid directors, 
officers, or employees not 
to exceed that paid to 
other depositors. 

PLACE OF BUSINESS. 



438f. Penalty for violation of any of 
the provisions of section 
22 of the Federal reserve 
act. 

439. .5210. List of shareholders. 

440. 5211. Reports to Comptroller of 

Currency. 

441. Act February 26, ISSl. Verifica- 

tion of reports. 

442. 5212. Report of dividends. 

443. 5213. Penalty for failure to make 

reports. 
444.^45. 5214 and act March 14. 1900. 
Taxes on circulation pay- 
able to the United States. 

446. 5215. Half-yearly return of circu- 

lation. 

447. 5216. Penalty for failure to make 

return. 

448. 5217. Enforcing tax on circula- 

tion. 

449. 5218. Refunding excess tax. 

450. Act March 1. 1879. No tax to be 

paid by insolvent banks. 

451. 5219. State taxation. 



400. Sec. 5190. — The usual business of each 

1864* c"°%6'^^^^^^^ association shall be transacted at an 

sec. 8 ; 13 Stat! banking house located in the place specified in its organi 

L., 101. zation certificate. 



national 
office 



or 



Note. — See act May 1, 1886, paragraph 211, ante, in reference 
to change in place of business. For authority of national bank to 
establish branches in foreign countries or dependencies of the 
United States, see section 25, Federal reserve act. 

CENTRAL EESERYE CITIES— EXPLANATORY NOTE. 



401. [Each association organized in any of the cities 
^ojg^P^^"**'^'"^ named in section 5191. United States Revised Statutes, 
was authorized by section 5195, United States Revised 
Statutes, to select, sub]ect to the approval of the Comp- 
troller of the Currency, an association in the citv of 
NeAv York where it might keep one-half of its lawful 
money reserve. This section originally provided for the 
redemption of circuhiting notes at such selected bank in 
that city, but all provisions other than that authorizing 
the keeping of a portion of the reserve with such bank 
were repealed by the act of June 20, 1874. Since the 
passage of the act of June 21, 1917, however, a member 
bank can not count any l)alances as reserve except those 
due from the Federal reserve bank of its district. 

Under the provisions of section 2 of the act of March 
3, 1887, whenever three-fourths in number of the na- 
tional banks located in any city of the United States hav- 
ing a population of 200,000 shall have made application 
to the Comptroller of the Currency, asking that such 



REGULATION OF THE BANKING BUSINESS. 71 

city bo made a central reserve city, like the city of New 
York, the Comptroller of the Currency, with the ap- 
proval of the Secretary of the Treasury, was authorized 
to grant such request, and under the provisions of this 
section the cities of St. Louis and Chicago were desig- 
nated as additional central reserve cities on March 18 
and .May 2, 1887, respectively. 

The Federal reserve act confers authority upon the 
Federal Reserve Board to add to the number of cities 
classified as central reserve cities, to reclassify existing 
reserve and central reserve cities, or to terminate their 
designation as such. (See section 11, paragraph E, 
Federal reserve act.)] 

Note. — Section 5195 and section 2 of the act of March 3, 1887, 
heretofore referred to, are as follows : 

" Sec. 5195. Each association organized in any of the cities 
named In section fifty-one hundred and ninety-one shall select, 
subject to the approval of the Comptroller of the Currency, an 
association in the city of New York, at which it will redeem its 
circulating notes at par, and may keep one-half of Its lawful 
money reserve in cash deposits in the city of New York. But the 
foregoing provision shall not apply to associations organized and 
located in the city of San Francisco for the purpose of issuing 
notes payable in gold. Each association not organized within the 
cities named shall select, subject to the approval of the Comp- 
troller, an association in either of the cities' named, at which it 
will redeem its circulating notes at par. The Comptroller shall 
give public notice of the names of the associations selected, at 
which I'edemptions are to be made by the respective associations, 
and of any change that may be made of the association at which 
the notes of any association are redeemed. Whenever any asso- 
ciation fails either to make the selection or to redeem its notes 
as aforesaid, the Comptroller of the Currency may, upon receiving 
satisfactory evidence thereof, appoint a receiver. In the manner 
provided for in section fifty-two hundred and thirty-four, to wind 
up its affairs. But this section shall not relieve any association 
from its liability to redeem its circulating notes at its own counter, 
at par, in lawful money on demand." 

Section 3 of the act of June 20, 1874, amending section 5195, 
Revised Statutes, provides — 

"That so much of section thirty-two (section 5195, Revised 
Statutes) of said national-bank act requiring or permitting the 
redemption of its circulating notes elsewhere than at its own 
counter, except as provided for in this section, is hereby repealed," 

Section 2, act of March 3, 18S7, provides : 

" That whenever three-fourths in number of the national banks 
located in any city of the United States having a population of 
two hundred thousand people shall make application to' the Comp- 
troller of the Currency, in writing, asking that such city may be a 
central reserve city, like the city of New York, in which one-half 
of the lawful-money reserve of the national banks located in other 
reserve cities may be deposited, as provided in section fifty-one 
hundred and ninety-five of the lievised Statutes, the Comptroller 
shall have authority, with the approval of the Secretary of the 
Treasury, to grant such request, and every bank located in such 
city shall at all times thereafter have on hand, in lawful money 
of the United States, twenty-five per centum of its deposits, as 
provided in section fifty-one hundred and ninety-one of the 
Revised Statutes." 



72 REGULATION OF THE EANKIISTG BUSINESS. 

RESERTE CITIES— EXPLANATORY NOTE. 

^^Explanatory 402. [Section 5191, United States Revised Statutes, 
names certain cities in which national banks located 
therein were required to have on hand in lawful money 
an amount equal to at least twenty-five per cent of the 
aggregate amount of their deposits, and provided that 
every other association should have on hand in lawful 
money an amount equal to fifteen per cent of the aggre- 
gate amount of its deposits. Section 5191 further provided 
that the Comj)troller of the Currency, with the concur- 
rence of the Secretary of the Treasury, might appoint a 
receiver for any association for failure to make good any 
deficiency in its reserve within thirty days after the date 
when the Comptroller of the Currency has notified the 
association to make good the deficiency. Section 5192, 
United States Revised Statutes, provided that three- 
fifths of the reserve of fifteen per cent required to be kept 
by country banks might consist of balances due to such 
associations from associations approved by the Comp- 
troller of the Currency in one of the reserve cities men- 
tioned in said section. Sinc« the passage of the act of 
June 21, 1917, however, a member bank can not count any 
balances as reserve except those due from the Federal 
Reserve Bank of its district. 

The following are the reserve cities designated in sec- 
tions 5191 and 5192 : 

Albany, Baltimore, Boston, Cincinnati, Chicago, Cleve- 
land, Detroit, Louisville, Milwaukee, New Orleans, New 
York, Philadelphia, Pittsburgh, St. Louis, San Fran- 
cisco, and Washington. 

In addition to the cities listed in the preceding para- 
graph, the city of Leavenworth, Kansas, was named in 
sections 5191 and 5192, but this designation was repealed 
by special act of date March 1, 1872. The cities of 
Charleston and Richmond were also named as reserve 
cities in section 5192, but were not included in the list of 
reserve cities enumerated in section 5191. The Comp- 
troller of the Currency, therefore, did not approve any 
banks in those cities as reserve agents. On April 27, 
1914, however, three-fourths of the banks in Richmond 
having requested that that city be designated as a reserve 
city, it was so designated under authority of the act of 
March 3, 1887. 

TheCom]itroller of the Currency was authorized under 
the act of IVfarch 3, 1887, to designate additional reserve 
cities whenever three-fourths in number of national 
banks located in any city of the United States having a 
population of 50,000 requested that the city in question 
be so designated. Tliis limit of ]iopulation was reduced 
to 25,000 by the act of Miirch 3, 1903. 

The city of New York listed as a reserve city in sections 
6191 and 5192 was designated as a central reserve city by 
section 5195, and the cities of St. Louis and Chicago 



REGULATION OF THE BANKING BUSINESS. 73 

named as reserve cities under sections 5191 and 5192 were 
designated, on March 18 and May 2, 1887, respectively, as 
central reserve cities by the Comptroller of the Currency 
with the concurrence of the Secretary of the Treasury, 
under the authority granted by the act of March 3, 1887. 

In conformity with the provisions of the acts of March 
3, 1887, and March 3, 1903, the following cities have been 
designated by the Comptroller as additional reserve 
cities : Atlanta, Brooklyn, Cedar Rapids, Columbus, Dal- 
las, Denver, Des Moines, Dubuque, Fort Worth, Galves- 
ton, Houston, Indianapolis, Kansas City (Kans.), Kansas 
City (Mo.), Lincoln, Los Angeles, Minneapolis, Musko- 
gee, Oklahoma City, Omaha, Portland, Pueblo, Rich- 
mond, Salt Lake City, San Antonio, Savannah, Seattle, 
Sioux City, South Omaha, Spokane, St. Joseph, St. Paul, 
Tacoma, Topeka, Waco, Wichita. On June 26, 1915, 
South Omaha was consolidated with Omaha. 

TIk' Federal reserve act confers authority upon the 
Federal Reserve Board to add to the number of cities 
classified as reserve cities, to reclassify existing reserve 
and central reserve cities, or to terminate their designa- 
tion as such. (See sec. 11, paragraph E, Federal reserve 
act.) 

Acting under the authority of this section the Federal 
Reserve Board has designated the following additional 
reserve cities: Birmingham, Ala.; Charleston, S. C: 
Chattanooga and Nashville, Tenn. ; Tulsa, Okla.; and 
Ogden, Utah.] 

Note. — Sections 5191 and 5192 have not been repealed, but the 
provisions with respect to specific reserve requirements for banks 
in the continental United States are superseded by section 19 of 
the Federal reserve act as amended June 21, 1917, these sections, 
however, remaining in full force and effect for national banks 
located in Alaska or in a dependency or insular possession or any 
part of the United States outside the continental United States, 
provided said national banks remain nonmember banks. The sec- 
tions in question are as follows, the italicized portion being super- 
seded, as far as banks in the continental United States are con- 
cerned, by later legislation, the remaining portions of these sec- 
tions being still in force. 

Sec. 5191. Every national hanking association in either of the 
folloiving cities: Albany, Baltimore, Boston, Cincinnati, Chicago, 
Cleveland, Detroit, Louisville, Milwaukee, New Orleans. New York, 
Philadelphia, Pittshurgh, St. Louis, San Francisco, and Washing- 
ton, shall at all times hare on hand, in lawful money of the 
United States, an amount equal to at least ticcnty-flve per centum 
of the aggregate amount of its notes in circulation and its de- 
posits; and every other association shall at all times have on hand, 
in lawful money of the United States, an amount cquat^to at least 
fifteen per centum of the aggregate amount of its notes in circular 
tion, and of its deposits. 

Whenever the lawful money of any association in any of the 
cities named shall be below tlie amount of tioenty-five per centum 
of its circulation and deposits and whiMiovcr the lawful money 
of any other association shall be (below fifteen per centum of its 
circuUition o?!(Z deposits), such associations shall not Increase its 
liabilities by making any new loans or discounts otherwise tliau 
by dicounting or purchasing bills of exchange payable at sight, 
Qor make any dividends of its profits until the required propor- 



74 REGULATION OF THE BANKING BUSINESS. 

tion, between the aggregate amount of its outstanding notes of 
circulation and deposits and its lawful money of the United 
States, has been restored. And the Comptroller of the Currency 
may notify any association, whose lawful money reserve shall 
be below the amount above required to be kept on hand, to make 
good such reserve ; and if such association shall fail for thirty 
days thereafter so to make good its reserve of lawful money, the 
Comptroller may, with the concurrence of the Secretary of the 
Treasury, appoint a receiver to wind up the business of the asso- 
ciation, as provided in section fifty-two hundred and thirty-four. 

Sec. 5192. Three-fifths of the reserve of fifteen per centum re- 
quired by the preceding section to be kept, may consist of balances 
due to an association, available for the redemption of its circulat- 
ing notes, from associations approved by the Comptroller of the 
Currency, organized tinder the act of June three, eighteen hun- 
dred and sixty-four, or under this title, and doing business in 
the cities of Albany, Baltimore, Boston, Charleston, Chicago, Cin- 
cinnati, Cleveland, Detroit, Louisville, Milwaukee, New Orleans, 
New York, Philadelphia, Pittsburgh, Richmond, St. Louis, San 
Francisco, and Washington. Clearing-house certificates, repre- 
senting specie or lawful money specially deposited for the purpose, 
of any clearing-house association, shall also be deemed to be law- 
ful money in the possession of any association belonging to such 
clearing house, holding and owning such certificate, within the 
preceding section. 

The provisions in section 5191 requiring reserve to be held 
against circulation were repealed by section 2, act of June 20, 
ISl-i, ivJiich provides " that section 31 of the National Bank act 
{sections 5191 and 5192 R. S.) be so amended that the several 
associations therein provided for shall not hereafter be required 
to keep on hand any amount of money ivhatcver, by reason of the 
amount of their respective circulations ; but the moneys required 
by said section to be kept at all times on hand shall be determined 
by the amount of deposits in all respects, as provided for in the 
said section. 

Additional reserve cities (act of March 3, 1903, amending act of 
March 3, 1887). — Sec. 1. That ichcnevcr three-fourths in num- 
ber of the national banks located in any city of the United States 
having a population of twenty-five thousand people shall make 
application to the Comptroller of the Currency, in ivriting, asking 
that the name of the city in tohich such banks are located shall 
be added to the cities named in sections fifty-one hundred and 
ninety-one and fifty-one hundred and ninety-two of the Revised 
Statutes, the Comptroller shall have authority to grant such re- 
quest, and every bank located in such city shall at all times there- 
after have on hand, in lawful money of the United States, an 
amount equal to at least twenty- five per centum of its deposits, 
as provided in sections fifty-one hundred and ninety-one and fifty- 
one hundred and ninety-five of the Revised Statutes. 

BANK EESERVES. 

DEMAND AND TIME DEPOSITS DEFINED. 

Act Dec. 23, 403. Sec. 19. — Demand deposits within the meaning? of 
as'^'sut.' ^L.i this act shall comprise all deposits payable within thirty 
^^\ct June "i' f^^ys? ^^^ time deposits shall comprise all deposits pay- 
ion, sec.^^io". ' able after thirty days, all savings accounts and certificates 
of deposit which are subject to not less than thirty days' 
notice before payment, and all postal savings deposits. 



REGULATION OF THE BANKING BUSINESS. 75 

RESERVE REQUIREMENTS. . 

404. Every bank, banking association, or trust com- Act Dec 23. 
pan}^ which is or which becomes a member of any Federal :^H^"'staT ^V, 
reserve bank shall establish and maintain reserve bal- ^"o.^^ ^^^^ ^^' 
ances with its Federal reserve bank as follows : 1917, sec. lo. ' 

RESERVE REQUIREMENTS FOR BANKS NOT IN RESERVE 
CITIES. 

405. (a) If not in a reserve or central reserve city, as ^ Act Dec. 23, 
now or hereafter defined, it shall hold and maintain with ag^^'st^at' \.\ 
the Federal reserve bank of its district an actual net bal- -"^-^j. j^^^ 21. 
ance equal to not less than seven per centum of the i9i7, sec. 10.' 
aggregate amount of its demand deposits and three per 

centum of its time deposits. 

RESERVE REQUIREMENTS FOR BANKS IN RESERVE 
CITIES. 

406. (5) If in a reserve city, as now or hereafter de- Act Dec. 23. 
fined, it shall hold and maintain with the Federal reserve ,^|^^'g4\^- i£; 
bank of its district an actual net balance equal to not less 270. 

than ten per centum of the aggregate amount of its de- igff* ts^stlt! 
mand deposits and three per centum of its time deposits: ^-^^^^juue •>! 
Provided, hoicever, That if located in the outlying dis- 1917, sec. 10. ' 
tricts of a reserve city or in territory added to such a city ^.^^^^ ^^p*' '^^' 
by the extension of its corporate charter, it may, upon 
the affirmative vote of five members of the Federal Re- 
serve Board, hold, and maintain the reserve balances 
specified in paragraph (a) hereof. 

RESERVE REQUIREMENTS FOR BANKS IN CENTRAL RE- 
SERVE CITIES. 

407. {c) If in a central reserve city, as now or here- j^-^|t ^^^- ^^\ 
after defined, it shall hold and maintain with the Federal ^ stat." l.! 
reserve bank of its district an actual net balance equal to "'Act Aug. 15. 
not less than thirteen per centum of the aggregate amount }^^^^^||^^ ^**'*- 
of its demand deposits and three per centum of its time Act .tune 21. 
deposits: Provided, however, That if located in the out- ^^.Ic't fept! 26. 
13'ing districts of a central reserve city or in territory i^is, 
added to such city by the extension of its corporate char- 
ter, it may. upon the affirmative vote of five members of 

the Federal Reserve Board, hold and maintain the reserve 
balances specified in paragraphs {a) or {b) thereof. 

MEMBER BANK FORBIDDEN TO KEEP ON DEPOSIT WITH 
NONMEMBER BANK A SUM IN EXCESS OF TEN PER 
CENT OF ITS OWN CAPITAL AND SURPLUS OR TO 
SECURE DISCOUNTS FOR NONMEMBER BANK. 

408. Xo member bank shall keep on deposit with any j.,-^.f* ^^e^- ^^i 
State bank or trust company which is not a member bank j5s 'stat l,' 
a sum in excess of ten per centum of its own paid-up 



76 REGULATION OF THE BAN-RING BUSINESS. 

1914* 38^stat' Capital and surplus. No member bank shall act as the 
L., 691. ' medium or agent of a nonmember bank in applying for or 

i9i7%ec°io"^' receiving discounts from a Federal reserve bank under the 
provisions of this act, except by permission of the Fed- 
eral Reserve Board. 

WITHDRAWAL OF EESERTE BY MEMBER BANK. 

lots* ^^^' 1^9^' ^^^' "^^^ required balance carried by a member bank 
38 Stat' L.', with a Federal reserve bank may, under the regulations 
^^ict Aug. 15, and subject to such penalties as may be prescribed by the 
if^ejji^^ st^*- Federal Reserve Board, be checked against and with- 
"Act June 21. drawn by such member bank for the purpose of meeting 
1917, sec. 10. existing liabilities: /^;'oy?V/ec^, however^ That no bank 
shall at any time make new loans or shall pay anj^ divi- 
dends unless and until the total balance required by law 
is fully restored. 

RESERYE REQUIREMENTS— HOW ESTIMATED. 

1913,* sec?' 1^9^;' ^l^- ^^ estimating the balances required by this act 
38 'stat.' L.; the net difference of amounts due to and from other banks 

Act Aug. 15, shall be taken as the basis for ascertaining the deposits 
if, ^6^2^^ ^*^*' against which required balances with Federal reserve 

Act June 21, banks shall be determined. 

1917, sec. 10. 

RESERYE REQUIREMENTS FOR NATIONAL BANKS LO- 
CATED IN ALASKA OR OUTSIDE THE CONTINENTAL 
UNITED STATES. 

19^3* J^c?' 1^9^;' ^11- National banks, or banks organized under local 

38 Stat." L.', laws, locatcd in Alaska or in a dependency or insular pos- 

Act Aug. 15, session or any part of the United States outside the con- 

^^m^^ ^*'^*- tinental United States may remain nonmember banks, 

Act Jun^ 21. and shall in that event maintain reserves and comply with 

all the conditions now provided by law regulating them ; 

or said banks may, with the consent of the Reserve Board, 

become member banks of anv one of the reserve districts, 

and shall in that event take stock, maintain reserves, and 

be subject to all the other provisions of this act. 

REDEMPTION FUND NOT COUNTED AS RESERYE. 

Act Dec. 23, 412. Sec. 20. — So much of sections two and three of the 
38 'stat.' "l.', act of June twentieth, eighteen hundred and seventy- 
^'^^' four, entitled "An act fixing the amount of United States 

notes, providing for a redistribution of the national-bank 
currency, and for other purposes," as provides that the 
fund deposited by any national banking association with 
the Treasurer of the United States for the redemption of 
its notes shall be counted as a part of its lawful reserve as 
provided in the act aforesaid, is hereby repealed. And 
from and after the passage of this act such fund of five 
per centum shall in no case be counted by any national 
banking association as a part of its lawful reserve. 



REGULATION OF THE BANKING BUSINESS. 77 

NO RESERTE REQUIRED TO BE HELD AGAINST UNITED 
STATES UEPOSITS. 

413. Sec. 7. — * * * That the provisions of section ^^ Act ^Apr.^ 24. 
fifty-one hundred and ninety-one of the Revised Statutes, 

as amended by the Federal reserve act and the amend- 
ments thereof, with reference to the reserves required to 
be kept by national banking associations and other mem- 
ber banks' of the Federal Reserve System, shall not apply 
to deposits of public moneys by the United States in des- 
ignated depositaries. 

PROTISIONS FOR REDEEMING CIRCULATION. FITE PER 
CENT REDEMPTION FUND. ACT JUNE 20, 1874. 

414. Sec. 3. — That every association organized, or to be jgif^* '^c'l^^sls; 
organized, under the provisions of the said act, and of sec |: is stat! 
the several acts amendatory thereof, shall at all times ' 

keep and have on deposit in the Treasury of the United 
States, in lawful money of the United States, a sum equal 
to five per centum of its circulation, to be held and used 
for the redemption of such circulation ; [which sum shall 
he counted as a part of its lawful reserve, as provided in 
section two of this act;] and when the circulating notes 
of any such associations, assorted or unassorted, shall be 
presented for redemption, in sums of one thousand dol- 
lars, or any multiple thereof, to the Treasurer of the 
United States, the same shall be redeemed in United 
States notes. All notes so redeemed shall be charged 
by the Treasurer of the United States to the respec- 
tive associations issuing the same, and he shall notify 
them severally, on the first day of each month, or oftener, 
at his discretion, of the amount of such redemptions ; and 
whenever such redemptions for any association shall 
amount to the sum of five hundred dollars, such associa- 
tion so notified shall forthwith deposit with the Treas- 
urer of the United States a sum in United States notes 
equal to the amount of its circulating notes so redeemed. 
And all notes of national banks worn, defaced, mutilated, 
or otherwise unfit for circulation shall, when received by 
any assistant treasurer, or at any designated depository 
of the United States, be forwarded to the Treasurer 
of the United States for redemption as provided herein. 
And when such redemptions have been so reimbursed, the 
circulating notes so redeemed shall be forwarded to the , 
respective associations by which they were issued ; but if 
any of such notes are worn, mutilated, defaced, or ren- 
dered otherwise unfit for use, they shall be forwarded to 
the Comptroller of the Currency and destroyed and re- 
placed as now provided by law : Provided, That each of 
said associations shall reimburse to the Treasury the 
charges for transportation, and the costs for assorting 
Buch notes; and the associations hereafter organized shall 



78 KEGULATION OF THE BA:NKING BUSINESS. 

also severally reimburse to the Treasury the cost of en- 
graving such plates as shall be ordered by each associa- 
tion, respectively; and the amount assessed upon each 
association shall he in proportion to the circulation re- 
deemed, and be charged to the fund on deposit with the 
Treasurer: And provided further, That so much of sec- 
tion thirty-two of said national-bank act requiring or 
permitting the redemption of its circulating notes else- 
where than at its own counter except as provided for in. 
this section, is hereby repealed. 

Note. — Under section 4 of the act of June 20, 1874, chapter 343, 
a national banking association, desiring to withdraw its circulat- 
ing notes and take up the bonds deposited with the United States 
Treasurer as security therefor, may do so by depositing with the 
Treasurer the requii'ed amount in lawful money, whether this 
consists of coin or of legal-tender notes. The Treasury, while 
privileged under sections 3 and 4 of that act to redeem such cir- 
culation in United States notes, has also the right to redeem the 
same circulation in coin. (Opinion Attorney General, vol. 17, 
121.) 

Section 32 of national-bank act is section .5195, Revised Statutes. 
The provision permitting the redemption fund to be counted as 
part of the lawful reserve was repealed by section 20 of the 
Federal reserve act. 

Other sections of act of June 20, 1874. 

Section 1 precedes Revised Statutes, 5133. 
Section 2. See note under paragraph 402, ante. 
Section 4 follows Revised Statutes, 5167. 
' Section 5 follows Revised Statutes, 5172. 

Section 6 relates to United States notes only. 
Sections 7-9 superseded by act of January 14, 1875, which 
follows. Revised Statutes, 5177. 

CLERICAL FORCE FOR REDEMPTION OF CIRCULATING 
NOTES. ACT MARCH 3, 1875. 

1875* LS^stat' ^^^" '^^^^ ^^ Carry into effect the provisions of sec- 
L., 399 ; part tiou three of the act entitled "An act fixing the amount 
ci yn ^appnf- of United States notes, providing for a redistribution of 
priation act. the natioual-bauk' currency, and for other purposes," 
approved June twentieth, eighteen hundred and seventy- 
four, the Secretary of the Treasury is authorized to ap- 
point the following force, to be employed under his direc- 
tion, namely: In the Office of the Treasurer: * * * 
In the Office of the Comptroller of the Currency * * * 
And at the end of each month, the Secretary of the Treas- 
ury shall reimburse the Treasury to the full amount paid 
out under the provisions of this section by transfer of 
said amount from the deposit of the national banking as- 
sociations with the Treasury of the United States ; and at 
the end of each fiscal year he shall transfer from said 
deposit to the Treasury of the United States such sum 
as may have been actually expended under his direction 
for stationery, rent, fuel, light, and other necessary inci- 
dental expenses which have been incurred in carrying 



REGULATION OF THE BANKING BUSINESS. 79 

into effect the provisions of the said section of the above- 
named act. 

Note. — -The appropriation bill for each year fixes th(' number 
and compensation of tlie clerks employed in the offices of the 
Treasurer of the United States and Comptroller of the Currency 
in connection with the redemption of circulating notes. 

DISPOSITION OF REDEMPTION ACCOUNT. ACT JULY 14, 
1890. 

416. Sec. 6.— That upon the passage of this act the ^g^o^* ^^"'y^Jll 
balances standing with the Treasurer of the United sec. 6 ; 26 stat! 
States to the respective credits of national banks for de- " 

posits made to redeem the circulating notes of such 
banks, and all deposits thereafter received for like pur- 
pose, shall be covered into the Treasury as a miscellane- 
ous receipt, and the Treasury of the United States shall 
redeem from the general cash in the Treasury the circu- 
lating notes of said banks which may come into his pos- 
session subject to redemption ; and upon the certificate 
of the Comptroller of the Currency that such notes have 
been received by him and that they have been destroyed 
and that no new notes will be issued in their place, reim- 
bursement of their amount shall be made to the Treas- 
urer, under such regulations as the Secretary of the 
Treasury may prescribe, from an appropriation hereby 
created, to be known as " national-bank notes ; Redemp- 
tion account," but the provisions of this act shall not 
apply to the deposits received under section three of the 
act of June twentieth, eighteen hundred and seventy- 
four, requiring every national bank to keep in lawful 
money with the Treasurer of the United States a sum 
equal to five per centum of its circulation, to be held 
and used for the redemption of its circulating notes: 
and the balance remaining of the deposits so covered 
shall, at the close of each month, be reported on the 
monthly public debt statement as debt of the United 
States bearing no interest. 

Note. — The other sections of this act relate to the purchase of 
silver bullion and issue of Treasury notes. 

REDEMPTION OF LOST OR STOLEN NOTES, AND OF NOTES 
NOT PROPERLY SIGNED. ACT JULY 28, 1892. 

417. That the provisions of the Eevised Statutes of the Act J"iy 28, 
United States, providing for the redemption of national l:, 322. 
bank notes, shall apply to all national bank notes that 

have been or may be issued to, or received by, any na- 
tional bank, notwithstanding such notes may have been 
lost by or stolen from the bank and put in circulation 
without the signature or upon the forged signature of the 
president or vice president and cashier. 



80 EEGULATIOlSr OF THE BANKING BUSINESS. 

418. Sec. 5193.— 

Repealed by act March 14, 1900. 

Note. — This section as enacted June 8, 1872 (17 Stat. L., 337), 
authorized the Secretary of the Treasui-y to receive on deposit 
from national banking associations United States notes in sums 
of not less than ten thousand dollars and to issue certificates 
therefor payable on demand in denominations of not less than 
five thousand dollars. This was repealed by act March 14, 1900, 
section 6, paragraph 752, post, which provides for issue of gold 
certificates payable to order in denominations of ten thousand 
dollars. 

419. Sec. 5194.— 

Dependent on 5193 and superseded by its repeal. 

PLACE FOR REDEMPTION OF CIRCULATING NOTES TO BE 
DESIGNATED. 

420. Sec. 5195.— 

See note under paragraph 401, ante. 

NATIONAL BANKS TO TAKE NOTES OF OTHER NATIONAL 
BANKS AT PAR. 

Act June 3, 421. Sec. 5196. — Every national banking association 
8 e^c' 32 ; 13 formed or existing under this Title, shall take and receive 
^*Act^juiy^^i2, ^t P^^5 for ^^J ^"^'^t or liability to it, any and all notes or 
1870, c. 282; bills issued by any lawfully organized national banking 
L.r253/^ *^*' association. But this provision shall not apply to any 

association organized for the purpose of issuing notes 

payable in gold. 

LIMITATION UPON RATE OF INTEREST WHICH MAY BE 
TAKEN. 

1864* c°°1.06' ^^^' ^®^' ^l^''- — ^^y association may take, receive, 
B e c' 30 ; 13 reserve, and charge on any loan or discount made, or upon 
Stat. L., 108. ^^^y note, bill of exchange, or other evidences of debt, 
interest at the rate allowed by the laws of the State, Ter- 
ritory, or District where the bank is located, and no more, 
except that where by the laws of any State a different 
rate is limited for banks of issue organized under State 
laws, the rate so limited shall be allowed for associations 
organized or existing in any such State under this Title. 
When no rate is fixed by the laws of the State, or Terri- 
tory, or District, the bank may take, receive, reserve, or 
charge a rate not exceeding seven per centum, and such 
interest may be taken in advance, reckoning the days for 
which the note, bill, or other evidence of debt has to run. 
And the purchase, discount, or sale of a bona fide bill of 
exchange, payable at another place than the place of such 
purchase, discount, or sale, at not more than the current 
rate of exchange for sight drafts in addition to the in- 
terest, shall not be considered as taking or receiving a 
greater rate of interest. 



REGULATION OF THE BANKING BUSINESS. 81 

PENALTir FOR TAKING UNLAWFUL INTEREST. JURIS- Act Tune 3, 
DICTION OF SUITS BY OR AGAINST NATIONAL BANKS. ^7*- 30 i^ 

Stat. L 108. 

423. Sec. 5198 [as amended 1875].— The taking, receiv- i875.*c. 80:\^8 
ing, reserving, or charging a rate of interest greater than ^^^^- ^- 22^- 
is allowed by the preceding section, when knowingly done, 

shall be deemed a forfeiture of the entire interest which 
the note, bill, or other evidence of debt carries with it, or 
which has beeii agreed to be paid thereon. In case the 
greater rate of interest has been paid, the person by 
whom it has been paid, or his legal representative, may 
recover back, in an action in the nature of an action of 
debt, twice the amount of the interest thus paid from the 
association taking or receiving the same; provided such 
action is commenced within two years from the time the 
usurious transaction occurred. That suits, actions, and 
proceedings against any association under this Title may 
be had in any circuit, district, or territorial court of the 
United States held within the district in which such asso- 
ciation 'may be established, or in any State, county, or 
municipal court in the county or city in which said asso- 
ciation is located having jurisdiction in similar cases. 

Note. — Additional provisions relating to jurisdiction of actions 
by and against national banks are contained in act July 12, 1882, 
paragraph 218, ante, and act of August 13, 1888, paragraph 214, 
ante. See also section 24, judiciary act passed March 3, 1911, 
paragraph 701. post, and section 736, Revised Statutes of the 
United States, paragraph 702, post, as to jurisdiction of district 
courts to enjoin Comptroller under section 5237, Revised Statutes, 
United States. 

DIVIDENDS. 

424. Sec. 5199. — The directors of any association may Act June 3, 
semiannually, declare a dividend of so much of the net l^^^.' is : ^Ts 
profits of the association as they shall judge expedient; stat. l., 109. 
but each association shall, before the declaration of a 
dividend, carry one-tenth part of its net profits of the 
preceding half year to its surplus fund until the same 

shall amount to twenty per centum of its capital stock. 

LIMITATION OF LIABILITIES WHICH MAY BE INCURRED 
BY ANY ONE PERSON, COMPANY, ETC. 

425. Sec. 5200 fas amended 19191. — The total liabilities Act Oct. 22. 

i • J.- J! £ 1919. 

to any association 01 any person or 01 any company, cor- 
poration, or firm for money borrowed, including in the 
liabilities of a company or firm the liabilities of the sev- 
164312°— 20 6 



82 EEGULATION OF THE BANKING BUSINESS. 

eral members thereof, shall at no time exceed 10 per 
centum of the amount of the capital stock of such asso- 
ciation, actually paid in and unimpaired, and 10 per 
centum of its unimpaired surplus fund: Provided^ how- 
ever. That (1) the discount of bills of exchange drawn in 
good faith against actually existing values, including 
drafts and bills of exchange secured by shipping docu- 
ments conveying or securing title to goods shipped, and 
including demand obligations when secured by docu- 
ments covering commodities in actual process of ship- 
ment, and also including bankers' acceptances of the kinds 
described in section 13 of the Federal reserve act, (2) the 
discount of commercial or business paper actually owned 
by the person, company, corporation, or firm negotiating 
the same, (3) the discount of notes secured by shipping 
documents, warehouse receipts, or other such documents 
conveying or securing title covering readily marketable 
nonperishable staples, including live stock, when the 
actual market value of the property securing the- obliga- 
tion is not at any time less than 115 per centum of the 
face amount of the notes secured by such documents and 
when such property is fully covered by insurance, and 
(4) the discount of any note or notes secured by not less 
than a like face amount of bonds or notes of the United 
States issued since April 24, 1917, or certificates of in- 
debtedness of the United States, shall not be considered 
as money borrowed within the meaning of this section. 
The total liabilities to any association, of any person or 
of any corporation, or firm, or company, or the several 
members thereof upon any note or notes purchased or dis- 
counted by such association and secured by bonds, notes, 
or certificates of indebtedness as described in (4) hereof 
shall not exceed (except to the extent permitted by rules 
and regulations prescribed by the Comptroller of the 
Currency, with the approval of the Secretary of the 
Treasury) 10 per centum of such capital stock and sur- 
plus fund of such association and the total liabilities to 
an}'' association of any person or of any corporation, or 
firm, or company, or the several members thereof for 
money borrowed, including the liabilities upon notes 
secured in the manner described under (3) hereof, except 
transactions (1), (2), and (4), shall not at any time ex- 
ceed 25 per centum of the amount of the association's 
paid-in and unimpaired capital stock and surplus. The 
exception made under (3) hereof shall not apply to the 
notes of any one person, corporation or firm or company, 



BEGULATION OF THE BANKING BUSINESS. 83 

or the several members thereof for more than six months 
in any consecutive twelve months. 

Note. — See Act March 3, 1919. " Victory Liberty Loan Act," 
section 1, wliich provides tliat the word " bonds," where it ap- 
pears in section 5200 of the Revised Statutes, as amended, shall 
be deemed to include notes issued under the " Victory Liberty 
Loan Act." 

ASSOCIATIONS MUST NOT LOAN ON OR PURCHASE THEIR 
OWN STOCK. 

426. Sec. 5201. — No association shall ciake any loan or Act June s. 
discount on the security of the shares of its own capital sic.' 35; 1:5 
stock, nor be the purchaser or holder of any such shares, ^*^*' ^•' ^^^■ 
unless such security or purchase shall be necessary to 

prevent loss upon a debt previously contracted in ^ood 
faith; and stock so purchased or acquired shall, within 
six months from the time of its purchase, be sold or dis- 
posed of at public or private sale ; or, in default thereof, 
a receiver may be appointed to close up the business of 
the association, according to section fifty-two hundred 
and thirty -four. 

RESTRICTION ON BANK'S INDEBTEDNESS. 

427. Sec. 5202 [as amended 1919]. — No national banking ^^Act^ ^m %^' 
association shall at any time be indebted, or in any way 36; 'is ' stat. l.; 
liable, to an amount exceeding the amount of its capital ^^Act Dec. 23, 
stock at such time actually paid in and remaining un- 19^3' ^'^■^^' ^ 
diminished by losses or otherwise, except on account of Act Apr.' 5, 
demands of the nature following: ^^Act oct. 22, 

First. Notes of circulation. ^s^^- 

Second. Moneys deposited with or collected by the asso- 
ciation. 

Third. Bills of exchange or drafts drawn against 
money actually on deposit to the credit of the association, 
or due thereto. 

Fourth. Liabilities to the stockholders of the associa- 
tion for dividends and reserve profits. 

Fifth. Liabilities incurred under the provisions of the 
Federal Reserve Act. 

Sixth. Liabilities incurred under the provisions of the 
War Finance Corporation Act. 

Seventh. Liabilities created by the indorsement of ac- 
cepted bills of exchange payable abroad actually owned 
by the indorsing bank and discounted at home or abroad. 



84 RBGUIiATION OF THE BANKING BUSINESS. 

RESTRICTION UPON USE OF CIRCULATING NOTES. 

Act June 3, 428. Sec. 5203. — No association shall, either directly or 
s e c' 37 ; li indirectly, pledge or hypothecate any of its notes or cir- 
stat. L., 110. culation, for the purpose of procuring money to be paid 
in on its capital stock, or to be used in its banking oper- 
ations, or otherwise ; nor shall any association use its cir- 
culating notes, or any part thereof, in any manner or 
form, to create or increase its capital stock. 

PROHIBITION UPON WITHDRAWAL OF CAPITAL. UN- 
EARNED DIVIDENDS PROHIBITED. 

Act June ?., 429. Scc. 5204.— No association, or any member thereof, 
sec' 38; 1^ shall, during the time it shall continue its banking op- 
stat. L., 110. erations, withdraw, or permit to be withdrawn, either in 
the form of dividends or otherwise, any portion of its 
capital. If losses have at any time been sustained by 
any such association, equal to or exceeding its undivided 
profits then on hand, no dividend shall be made; and no 
dividend shall ever be made by any association, while it 
continues its banking operations, to an amount greater 
than its net profits then on hand, deducting therefrom its 
losses and bad debts. All debts due to any association, 
on which interest is past due and unpaid for a period of 
six months, unless the same are well secured, and in proc- 
ess of collection, shall be considered bad debts within 
the meaning of this section. But nothing in this section 
shall prevent the reduction of the capital stock of the as- 
sociation under section fifty-one hundred and forty- 
three. 

ASSESSMENT FOR FAILURE TO PAT UP CAPITAL ^-TOCK 
OR FOR IMPAIRMENT OF CAPITAL. 

Act Mar. 3, 430. Scc. 5205 [as amended 18761. — Every association 
see. i ; 17 slat! wliich shall have failed to pay up its capital stock, as re- 
^"A^c't^june 30 Q^^i^'^d by law, and every association whose capital stock 
1876, c. 156! shall have become impaired by losses or otherwise, shall, 
L.%4! ^^ ^*^*' within three months after receiving notice thereof from 
the Comptroller of the Currency, pay the deficiency in 
the capital stock, by assessment upon the shareholders 
pro rata for the amount of capital stock held by each; 
and the Treasurer of the United States shall withhold 
the interest upon all bonds held by him in trust for any 
such association, upon notification from the Comptroller 
of the Currency, until otherwise notified by him. If any 
such association shall fail to pay up its capital stock, and 
shall refuse to go into liquidation, as provided by law, 
for three months after receiving notice from the Comp- 
troller, a receiver may be appointed to close up the busi- 
ness of the association, according to the provisions of 
section fifty-two hundred and thirty-four: And pro- 
vided^ That if any shareholder or shareholders of such 
bank shall neglect or refuse, after three months' notice, to 



REGULATION OF THE BANKING BUSINESS. 85 

pay the assessment, as provided in this section, it shall be 
the duty of the board of directors to cause a suflicient ' 
amount of the capital stock of such shareholder or share- 
holders to be sold at public auction (after thirty days' 
notice shall be given by posting such notice of sale in the 
office of the bank, and by publishing such notice in a news- 
paper of the city or town in which the bank is located, or 
in a newspaper published nearest thereto), to make good 
the deficiency, and the balance, if any, shall be returned 
to such delinquent shareholder or shareholders. 

PROHIBITION AGAINST UNCURRENT NOTES. 

431. Sec. 52O6.--N0 association shall at any time payjg^f c""%6' 
out on loans or discounts, or in purchasing drafts or bills sec.' 36; 13 
of exchange, or in payment of deposits, or in any other ^***" ^' "^' 
mode pay or put in circulation, the notes of any bank or 
banking association which are not, at any such time, 
receivable, at par, on deposit, and in payment of debts by 

the association so paying out or circulating such notes; 
nor shall any association knowingly pay out or put in 
circulation any notes issued by any bank or banking asso- 
ciation which at the time of such paying out or putting in 
circulation is not redeeming its circulating notes in law- 
ful money of the United States. 

UNITED STATES NOTES NOT TO BE HELD AS €OLLAT- 
ERAL. 

432. Sec. 5207.— No association shall hereafter offer or i8^^*/fo.\^^ 
receive United States notes or national-bank notes as stat.' l., 270. 
security or as collateral security for any loan of money, 

or for a consideration agree to withhold the same from 
use, or offer or receive the custody or promise of custody 
of such notes as security, or as collateral security, or 
consideration for any loan of money. Any association 
offending against the provisions of this section shall be 
deemed guilty of a misdemeanor, and shall be fined not 
more than one thousand dollars and a further sum equal 
to one-third of the money so loaned. The officer or offi- 
cers of any association who shall make any such loan 
shall be liable for a further sum equal to one-quarter of 
the money loaned ; and any fine or penalty incurred by a 
violation of this section shall be recoverable for the bene- 
fit of the party bringing such suit. 

ISSUE OF GOLD CERTIFICATES. ACT .lULY 12, 1SS2. 

433. Sec. 12. — That the Secretary of the Treasury is Act July 12, 
authorized and directed to receive deposits of gold coin 22^"'suu.' ^l.'. 
* * * and issue certificates therefor * * *. Such ^"^• 
certificates * * * when held by any national bank- 
ing association, sliall be counted as part of its lawful 

reserve; and no national banking association shall be a 



86 REGULATION OF THE BANKING BUSINESS. 

member of an}^ clearing house in which such certificates 
shall not be receivable in the settlement of clearing-house 
balances: * * * And the provisions of section fifty- 
two hundred and seven of the Eevised Statutes shall be 
applicable to the certificates herein authorized and di- 
rected to be issued. 

Note. — This section given in full, paragraph 729, post. See also 
currency act of March 14, 1900, as amended March 4, 1907, March 
2, 1911, and June 12, 1916, paragraph 754, post, relating to gold 
certificates, and making ten dollars lowest denomination. 

PENALTY FOR FALSELY CERTIFYING CHECKS. 

i869*c^35';S ^^^^ ^®^- 5208.— It shall be unlawful for any officer, 
Stat.' L., 335. dircctor, agent, or employee of any Federal reserve bank, 
1918.* ^^^'* ^^' or of any memljer bank as defined in the act of December 
twenty-third, nineteen hundred and thirteen, known as 
the Federal reserve act, to certify any check drawn upon 
such Federal reserve bank or member bank unless the 
person, firm, or corporation drawing the check has on 
deposit with such Federal reserve bank or member bank, 
at the times such check is certified, an amount of money 
not less than the amount specified in such check. Any 
check so certified by a duly authorized officer, director, 
agent, or employee shall be a good and valid obligation 
against such Federal reserve bank or member bank ; but 
the act of any officer, director, agent, or employee of any 
such Federal reserve bank or member bank in violation 
of this section shall, in the discretion of the Federal Re- 
serve Board, subject such Federal reserve bank to the 
penalties imposed by section eleven, subsection (h), of the 
Federal reserve act, and shall subject such member bank 
if a national bank to the liabilities and proceedings on the 
part of the Comptroller of the Currency provided for in 
section fifty-two hundred and thirty-four, Revised 
Statutes, and shall, in the discretion of the Federal Re- 
serve Board, subject any other member bank to the penal- 
ties imposed by section nine of said Federal reserve act 
for the violation of any of the provisions of said act. 
Any officer, director, agent, or employee of any Federal 
resarve bank or member bank who shall willfully violate 
the provisions of this section, or who shall resort to any 
device, or receive any fictitious obligation, directly or 
collaterally, in order to evade the provisions thereof, or 
who shall certify a check before the amount thereof shall 
have been regularly entered to the credit of the drawer 
upon the books of the bank, shall be deemed guilty of a 
misdemeanor and shall, on conviction thereof in any dis- 
trict court of the United States, be fined not more than 
$5,000, or shall be imprisoned for not more than five 
years, or both, in the discretion of the coui-t. 



REGULATION OF THE BANKING BUSINESS. 87 

PUNISHMENT FOR FALSELY CERTIFYING CHECKS. ACT 
JULY 13, 1882. 

435. Sec. 13.— 

Superseded by act of Sept. 26, 1918. 

PENALTY FOR EMBEZZLEMENT. ABSTRACTION, WILLFUL 
MISAPPLICATION, FALSE ENTRIES, ETC. 

436. Sec. 5209. — Any officer, director, agent, or em- Act June 3, 
ployee of any Federal reserve bank, or of any member l^e^t 55 ; ^^i^3 
bank as defined in the act of December twenty-third, ^*\^^^ '^Xpr^^ 
nineteen hundred and thirteen, known as the Federal re- isso, c iT; le 
serve act, who embezzles, abstracts, or willfully misap- ^^Act^ jJiV g, 
plies anv of the moneys, funds, or credits of such Federal i«'^^'ei.^v ^^t ' 
reserve biink or member bank, or who, without authority i95. 

from the directors of such Federal reserve bank or mem- 1918* ^^^*" ^^' 
ber bank, issues or puts in circulation any of the notes 
of such Federal reserve bank or member bank, or who, 
without such authority, issues or puts forth any certifi- 
cate of deposit, draws any order or bill of exchange, 
makes any acceptance, assigns any note, bond, draft, bill 
of exchange, mortgage, judgment, or decree, or who 
makes any false entry in any book, report, or statement of 
such Federal reserve bank or member bank, with intent 
in any case to injure or defraud such Federal reserve 
bank or member bank, or any other company, body politic 
or corporate, or any individual person, or to deceive any 
officer of such Federal reserve bank or member bank, or 
the Comptroller of the Currency, or any agent or exam- 
iner appointed to examine the affairs of such Federal 
reserve bank or member bank, or the Federal Reserve 
Board ; and every receiver of a national banking associa- 
tion who, with like intent to defraud or injure, embezzles, 
abstracts, purloins, or willfully misapplies any of the- 
moneys, funds, or assets of his trust, and every person' 
who, with like intent, aids or abets any officer, director, 
agent, employee, or receiver in any violation of this sec- 
tion shall be deemed guilty of a misdemeanor, and upon 
conviction thereof in any district court of the United 
States shall be fined not more than $5,000 or shall be 
imprisoned for not more than five years, or both, in the 
discretion of the court. 

Any Federal reserve agent, or any agent or employee 
of such Federal reserve agent, or of the Federal Eeserve 
Board, who embezzles, abstracts, or willfully misapplies 
any moneys, funds, or securities intrusted to his care, or 
without complying with or in violation of the provisions 
of the Federal reserve act, issues or put in circulation any 
Federal reserve notes shall be guilty of a misdemeanor 
and upon conviction in any district court of the United 
States shall be fined not more than $5,000 or imprisoned 
for not more than five years, or both, in the discretion 
of the court. 



88 REGULATION OF THE BANKING BUSINESS. 

NATIONAL BANKS NOT PEKMITTED TO MAKE CONTRIBIJ. 
TIONS IN CONNECTION >VITH ELECTION TO POLITICAL 
OFFICE. ACT JANUARY 26, 1907. 

Act Jan. 26, 437. That it shall be unlawful for any national bank, or 
L?.^8^4f^ ^***' i^ny corporation organized by authority of any laws of 
Congress, to make a money contribution in connection 
with any election to any political office. It shall also be 
unlawful for any corporation whatever to make a money 
contribution in connection with any election at which 
Presidential and Vice-Presidential electors or a Eepre- 
sentative in Congress is to be voted for or any election by 
any State legislature of a United States Senator. Every 
corporation which shall make any contribution in viola- 
tion of the foregoing provisions shall be subject to a fin© 
not exceeding five thousand dollars, and every, officer or 
director of any corporation who shall consent to any con- 
tribution by the corporation in violation of the foregoing 
provisions shall upon conviction be punished by a fine of 
not exceeding one thousand and not less than two hun- 
dred and fifty dollars, or by imprisonment for a term of 
not more than one year, or both such fine and imprison- 
ment in the discretion of the court. 

MEMBER BANK CAN NOT MAKE LOAN OR GRANT A GRA- 
TUITY TO ANY NATIONAL BANK EXAMINER. 

Act Dec. 23, 438a. No member bank and no officer, director, or em- 
38 Stat!' L.jployee thereof shall hereafter make any loan or grant 
^'^aW T„r,„ oi anv gratuitv to anv bank examiner. Anv bank officer, 

1917, sec. n. director, or employee violating this provision shall be 

1918. ^^^' ^^' deemed guilty of a misdemeanor and shall be impris- 

oned not exceeding one year or fined not more than 
$5,000, or both; and may be fined a further sum equal 
to the money so loaned or gratuity given. 

Any examiner accepting a loan or gratuity from any 
bank examined by him or from an officer, director, or 
employee thereof shall be deemed guilty of a misde- 
meanor and shall be imprisoned one year or fined not 
more than $5,000, or both, and may be fined a further 
sum equal to the money so loaned or gratuity given, and 
shall forever thereafter be disqualified from holding office 
as a national bank examiner. 

NATIONAL BANK EXAMINER CAN NOT PERFORM ANT 
SERTICE FOR COMPENSATION FOR ANY BANK OR OF- 
FICER. EXAMINER CAN NOT DISCLOSE THE NAMES 
OF BORROWERS OR COLLATERAL WITHOUT FIRST 
OBTAINING WRITTEN CONSENT OF COMPTROLLER. 

19^3* ^^^' 2^' ^38b. No national bank examiner shall perform any 
38 staV L.] other service for compensation while holding such office 
^'^Act June 21, ^^r any bank or officer, director, or employee thereof. 
191^'^. sec. 11 ' No examiner, public or private, shall disclose the 
1918. ^^ ■ ' names of borrowers or the collateral for loans of a mem- 
ber bank to other than the proper officers of such bank 



REGULATION OF THE BANKING BUSINESS. 89 

■without first havino; obtained the express pennission in 
Tvritinfj; from the Comptroller of the Currency, or from 
the board of directors of such bank, except when ordered 
to do so by a court of competent jurisdiction, or by direc- 
tion of the Congress of the United States, or of either 
House thereof, or am- committee of Congi-ess, or of either 
House duly authorized. Any bank examiner violating the 
provisions of this subsection shall be imprisoned not 
more than one j'ear or fined not more than $5,000, or 
both. 

PENALTY FOR OFFICER. DIRECTOR. OR EilPIOTEE OF 
MEMBER BANK WHO RECEITES ANY COMMISSION OR. 
GIFT IN CONNECTION WITH ANY LOAN. 

438c. Except as herein provided, any officer, director, 19^3* ^^- ^h 
employee, or attorney of a member bank who stipulates 38^ 'stat.' £.', 
for or receives or consents or agrees to receive any fee, 'ict June 21, 
commission, gift, or thing of value from any person, ^^^^;. H^j. -^26 
firm, or corporation, for procuring or endeavoring to pro- I9i8. 
cure for such person, firm, or corporation, or for any 
other person, firm, or corporation, an}' loan from or the 
purchase or discount of any paper, note, draft, check, or 
bill of exchange by such member bank shall be deemed 
guilty of a misdemeanor and shall be imprisoned not 
more than one year or fined not more than $5,000, or 
both. 

PURCHASE OF SECURITIES OR PROPERTY FROM ONE OF 
ITS DIRECTORS, OR SALES TO A DIRECTOR BY A MEM- 
BER BANK. 

438d. Any member bank may contract for, or purchase ^g^^* '^^- ^^'. 
from, any of its directors or from any firm of which any ss 'stat.' "u, 
of its directors is a member, any securities or other prop- ^^ict June 21, 
erty, when (and not otherwise) such purchase is made in ^^^^-^ lept^le 
the regular course of business upon terms not less favor- I9i8. 
able to the bank than those offered to others, or when 
such purchase is authorized by a majority of the board 
of directors not interested in the sale of such securities 
or property, such authority to be evidenced by the af- 
firmative vote or written assent of such directors: Pro- 
vided, however, That when any director, or firm of 
which any director is a member, acting for or on behalf 
of others, sells securities or other property to a member 
bank, the Federal Reserve Board by regulation may, in 
any or all cases, require a full disclosure to be made, on 
forms to be prescribed by it, of all commissions or other 
considerations received, and whenever such director or 
firm, acting in his or its own behalf, sells securities or 
other property to the bank the Federal Reserve Board, 
by regulation, may require a full disclosure of all profit 
realized from sucli sale. 

Any member bank may sell securities or other prop- 
erty to any of its directoi*s, or to a firm of wliich any of 



90 REGULATION OF THE BANKING BUSINESS. 

its directors is a member, in the regular course of busi- 
ness on terms not more favorable to such director or firm 
than those offered to others, or when such sale is author- 
ized by a majority of the board of directors of a member 
bank to be evidenced by their affirmative vote or written 
assent: Provided^ however^ That nothing in this subsec- 
tion contained shall be construed as authorizing member 
banks to purchase or sell securities or other property 
which such banks are not otherwise authorized by law to 
purchase or sell. 

RATE OF INTEREST PAID DIRECTORS, OFFICERS, OR 
EMPLOYEES NOT TO EXCEED THAT PAID TO OTHER 
DEPOSITORS. 

i9iV* fee' 2^2^' 438e. No member bank shall pay to any director, officer, 

38^ Stat." L.| attorney, or employee a greater rate of interest on the 

Act June 21, deposits of such director, officer, attorney, or employee 

"^^Ac't Sept "^26 *^^^^ ^^^^ P^^^^ ^^ other depositors on similar deposits 
1918. ' with such member bank. 

PENALTY FOR VIOLATION OF ANY OF THE PROVISIONS 
OF SECTION 22 OF THE FEDERAL RESERVE ACT. 

1913* sec!^" 2^2^' 4:38f . If the directors or officers of any member bank 
Ifo '®***' ^•' shall knowingly violate or permit any of the agents, offi- 
Act June 21. cers, or directors of any member bank to violate any of 
"^^Act Sept ^26 ^^^ provisions of this section or regulations of the board 
1918. ' made under authority thereof, every director and officer 

Participating in or assenting to such violation shall be 
eld liable in his personal and individual capacity for all 
damages which the member bank, its shareholders, or 
any other persons shall have sustained in consequence of 
such violation. 

LIST OF SHAREHOLDERS. 

1864*. c!"" 106' 439. Sec. 5210.— The president and cashier of every 
Stat' L^^'ii/^ii^tional banking association shall cause to be kept at all 
times a full and correct list of the names and residences 
of all the shareholders in the association, and the number 
of shares held by each, in the office where its business is 
transacted. Such list shall be subject to the inspection 
of all the shareholders and creditors of the association, 
and the officers authorized to assess taxes under State 
authority, during business hours of each day in which 
business may be legally transacted. A copy of such list, 
on the first Monday of July of each year, verified by the 
• • oath of such president or cashier, shall be transmitted to 

the Comptroller of the Currency. 

REPORTS TO COMPTROLLER OF THE CURRENCY. 

1864* c"°\o6' ^^^- ^^^- ^^^^ [^^ amended 1877].— Every association 
s L' c' 34 ; li shall make to the Comptroller of the Currency not less 
Stat. L.. 109. ^Qj^ gyg reports during each year, according to the form 



REGULATION OF THE BANKING BUSINESS. 91 

which may be prescribed by him, verified by the oath or ^g^^* a^'^iso! 
affirmation of the president or cashier of such association, «ec. i ; I's stat! 
and attested by the signature of at least three of the Act Feb. 27. 
directors. Each such report shall exhibit, in detail and HH' £; ^25'2.'^ 
under appropriate heads, the resources and liabilities of 
the association at the close of business on any past day by 
him specified ; and shall be transmitted to the Comptrol- 
ler within five days after the receipt of a request or requi- 
sition therefor from him, and in the same form in which 
it is made to the Comptroller shall be published in a 
newspaper published in the place where such association 
is established, or if there is no newspaper in the place, 
then in the one published nearest thereto in the same 
county, at the expense of the association ; and such proof 
of publication shall be furnished as may be required by 
the Comptroller. The Comptroller shall also have power 
to call for special reports from any particular association 
whenever in his judgment the same are necessary in 
order to a full and complete Imowledge of its condition. 

Note. — Section 713 of the Code of Laws of the District of Colum- 
bia provides : " That all publications authorized or required by 
said section fifty-two hundred and eleven of the Revised Statutes, 
and all other publications authorized or required by listing law 
to be made in the District of Columbia, shall be printed in two 
or more daily newspapers of general circulation, published in the 
City of Washington, one of which shall be a morning newspaper." 

The Federal Reserve Board is authorized by section 11 of the 
Federal reserve act to examine at its discretion the accounts, 
books, and affairs of each Federal reserve bank and of each mem- 
ber bank and to require such statements and reports as It may 
deem necessary. 

VERIFICATION OF REPORTS. ACT FEBRUARY 26, 1881. 

441. That the oath or affirmation required by section ^8fj*^*^,^|^-.^2^i' 
fifty-two hundred and eleven of the Revised Statutes, Btat,' l., 352. 
verifying the returns made by national banks to the 
Comptroller of the Currency, when taken before a notary 

public properly authorized and commissioned by the 
State in which such notary resides and the bank is lo- 
cated, or any other officer having an official seal, author- 
ized in such State to administer oaths, shall be a sufficient 
verification as contemplated by said section fifty-two hun- 
dred and eleven : Provided, That the officer administering 
the oath is not an officer of the bank. 

REPORT OF DIVIDENDS. 

442. Sec. 5212. — In addition to the reports required by iggg* ^^""i.^o! 
the preceding section, each association shall report to the l^'^-|.,v^^ ^*"*' 
Comptroller of the Currency, within ten days after de- ' 
daring any dividend, the amount of such dividend, and 

the amount of net earnings in excess of such dividend. 
Such reports shall be attested by the oath of the president 
or cashier of the association. 



92 REGULATION OF THE BANKING BUSINESS. 

PENALTY FOR FAILURE TO MAKE REPORTS. 

Act Mar. 3, 443. Sec. 5213. — Every association which fails to make 
sees.' h'2 : id and transmit any report required under either of the two 
Stat. L., 326. preceding sections shall be subject to a penalty of one 
hundred dollars for each day after the periods, respec- 
tively, therein mentioned, that it delays to make and 
transmit its report. Whenever any association delays or 
refuses to pay the penalty herein imposed, after it has 
been assessed by the Comptroller of the Currency, the 
amount thereof may be retained by the Treasurer of the 
United States, upon the order of the Comptroller of the 
Currency, out of the interest, as it may become due to the 
association, on the bonds dejDosited with him to secure 
circulation. All sums of money collected for penalties 
under this section shall be paid into the Treasury of the 
United States. 

TAXES PAYABLE TO THE UNITED STATES. 

Sec. 5214, u. 444. Scc. 5214. — In lieu of all existino- taxes, every asso- 
Act June 3, ciation shall pay to the Treasurer of the United States, 
s e^c ' 41 • ^^li ^^ ^^^® mj^nths of January and July, a duty of one- 
stat'. L., 111. half of one per centum each half year upon the average 
amount of its notes in circulation, [and a duty of one- 
quarter of one per centum each half year upon the aver- 
age amownt of its deposits, and a duty of one-quarter of 
one per centum, each half year on the average amount of 
its capital stock, heyond the amount invested in United 
States hands']. 

1900* ^c'^' it- ^^^' ^^^' ^^' — That every national banking association 
31 Stat. L., 49. having on deposit, as provided by law, bonds of the 
United States bearing interest at the rate of two per 
centum per annum, issued under the provisions of this 
Act, to secure its circulating notes, shall pay to the 
Treasurer of the United States, in the months of Janu- 
ar}^ and July, a tax of one-fourth of one per centum 
each half year upon the average amount of such of its 
notes in circulation as are based upon the deposit of said 
two per centum bonds; and such taxes shall be in lieu 
of existing taxes on its notes in circulation imposed by 
section fifty-two hundred and fourteen of the Revised 
Statutes. 

Note. — The provisions of section 5214, covering taxes on the 
average amount of deposits and capital, were repealed by the act 
of March 3, 1SS3. The 2 per cent Panama Canal bonds were 
given all rights and privileges accorded to other 2 per cent bonds 
of the United States by the act of December 21, 1905. 

On May 30, 1908, section 5214 was reenacted so as to cover 
the provisions of the original section as modified by the acts 
of March 3, 1883, March 14, 1900, and December 21, 1905. and in 
addition thereto there was added provisions for the taxation of 
the additional circulation issued under the act. The act of May 
30, 1908, however, expired on June 30, 1914, and while it was ex- 
tended by section 27 of the act of December 23, 1913, to June 
30, 1915, it was expressly provided in the latter act that on the 



REGULATION" OF THE BAISTKING BUSINESS. 93 

expiration of the act of May 30, 1908, section 5214 should be re- 
enacted to read as such section read prior to l\Iay 30, 190S. The acts 
of December 23, 1913, and Aufrust 4, 1914. amended the provisions 
In this section of the act of May 30, 1908, relative to the taxa- 
tion of emergency currency. All the provisions for the emer- 
gency currency expired on June 30, 1915. 

The following is section 5214 as it stood prior to the expiration 
of the Emergency Currency Act on June 30, 1915, with all amend- 
ments : 

" Sec. 5214. National banking associations having on deposit 
bonds of the United States, bearing interest at the rate of two 
per centum per annum, including the bonds issued for the con- 
struction of the Panama Canal, under the provisions of .section 
eight of 'An Act to provide for the construction of a canal con- 
necting the waters of the Atlantic and Pacific oceans.' approved 
June twenty-eighth, nineteen hundred and two, to secure its 
circulating notes, shall pay to the Treasury of the Unitetl States, 
in the months of January and July, a tax of one-fourth of one 
per centum each half year upon the average amount of such of its 
notes in circulation as are based upon the deposit of such bonds; 
and such associations having on deposit bonds of the United 
States bearing interest at a rate higher than two per centum 
per annum shall pay a tax of one-half of one per centum each 
half year upon the average amount of such of its notes in circula- 
tion as are based upon the deposit of such bonds. 

" National banking associations having circulating notes secured 
otherwise than by bonds of the United States, shall pay for the 
first three months a tax at the rate of three per centum per annum 
upon the average amount of such of their notes in circulation as 
are based upon the deposit of such securities, and afterwards an 
additional tax rate of one-half of one per centum per annum for 
each month until a tax of six per centum per annum is reached, 
and thereafter such tax of six per centum per annum upon the 
average amount of such notes. Every national banking associa- 
tion having outstanding circulating notes secured by a deposit of 
other securities than United States bonds shall make monthly 
returns, under oath of its president or cashier, to the Treasurer 
of the United States, in such form as the Treasurer may prescribe, 
of the average monthly amount of its notes so secured in circula- 
tion ; and it shall be the duty of the Comptroller of the Currency 
to cause such reports of notes in circulation to be verified by 
examination of the bank's records. The taxes received on circu- 
lating notes secured otherwise than by bonds of the United States 
shall be paid into the Division of Redemption of the Treasury and 
credited and added to the reserve fund held for the redemption of 
United States and other notes." 

HALF-YEARLY RETURN OF CIRCULATION [deposits and 
capital stock]. 

446. Sec. 5215. — In order to enable the Treasurer to Act J^ne 3, 
assess the duties imposed by the preceding section, each sec' 41; is 
association shall, within ten days from the first days of ^*^^" ^" ^^^' 
January and July of each year, make a return, under the 
oath of its president or cashier, to the Treasurer of the 
United States, in such form as the Treasurer may pre- 
scribe, of the average amount of its notes in circulation, 
[aiid of the average ammint of its deposits., and of the 
average amount of its capital stock, heyond the amount 
invested in United States bonds], for the six months next 
preceding the most recent first day of January or July. 
Every association which fails so to make such return 
shall be liable to a penalty of two hundred dollars, to be 



94 REGUL-ATION OF THE BANKIISTG BUSINESS. 

collected either out of the interest as it may become due 
such association on the bonds deposited with the Treas- 
urer, or, at his option, in the manner in which penalties 
are to be collected of other corporations under the laws 
of the United States. 

Note. — The taxes on the average amount of deposits and capital 
stock were repealed by the act of March 3, 1883. 

PENALTY FOR FAILURE TO MAKE RETURN. 

Act June 3, 447. Scc. 5216. — Whenever any association fails to make 
ITc.' 4i ; ^^li the half-yearly return required by the preceding section, , 
Stat. L., ill. the duties to be paid by such association shall be assessed 
upon the amount of notes delivered to such association 
by the Comptroller of the Currency, [and upon the high- 
est amount of its deposits and capital stocky to he asceV' 
tained in such Tnanner as the Treasurer may deem hest.'] 

Note. — See note under section 5215 stating that tax on deposits 
and capital stock had been repealed. 

ENFORCING TAX ON CIRCULATION. 

Act .Tune 3, 448. Scc. 5217. — Whenever an association fails to pay 
s e^c.' 41 ; ^^1^^ the duties imposed by the three preceding sections, the 
Stat. L., 111. sums due may be collected in the manner provided for the 
collection of United States taxes from other corpora- 
tions ; or the Treasurer may reserve the amount out of the 
interest, as it may become due, on the bonds deposited 
with him by such defaulting association. 

REFUNDING EXCESS TAX. 

Resolution 449. Scc. 5218. — In all cases where an association has 
No. ' 49; __i^ paid or may pay in excess of what may be or has been 
as^ainendpd 'in lound due f rom it, on account of the duty required to be 
R. s. 5218. paid to the Treasurer of the United States, the associa- 
tion may state an account therefor, which, on being certi- 
fied by the Treasurer of the United States, and found 
correct by the First Comptroller of the Treasury, shall 
be refunded in the ordinary manner by warrant on the 
Treasury. 

NO TAX TO BE PAID BY INSOLVENT BANKS. ACT MARCH 

1, 1879. 

nJe *^a""' mIf' ^^^" ^^^' ^^' — ^^^^ whenever and after any bank has 
1, i87!>, sec! ceased to do business by reason of insolvency or bank- 
22 j^ 20 Stat. L., ruptcy, no tax shall be a.ssessed or collected, or paid into 
the Treasury of the United States, on account of such 
bank, which shall diminish the assets thereof necessary 
for the full payment of all its depositors; and such tax 
shall be abated from such national banks as are found by 
the Comptroller of the Currency to be insolvent; * * •. 



REGtJLATION OF THE BANKING BUSINESS. 95 

STATE TAXATION. 

451. Sec. 5219.— Nothing herein shall prevent all the ^^^^J J"°io6* 
shares in any association from being included in the valu- sec' 4i; li 
ation of the personal property of the owner or holder of ' let. iVb. io, 
such shares, in assessing taxes imposed by authority of ^f^^; j^;^ ^4 ^^ 
the State within which the association is located; but the 
legishiture of each State may determine and direct the 
manner and place of taxing all the shares of national 
banking associations located within the State, subject 
only to the two restrictions, that the taxation shall not be 
at a greater rate than is assessed upon other moneyed 
capital in the hands of individual citizens of such State, 
and that the shares of any national banking association 
owned by nonresidents of any State shall be taxed in the 
city or town where the bank is located, and not elsewhere. 
Nothing herein shall be construed to exempt the real 
property of associations from either State, county, or mii- 
nicipal taxes, to the same extent, according to its value, 
as other real property is taxed. 



DISSOLUTION AND RECEIVERSHIP. 



164312°— 20 7 97 



CHAPTER V. 



DISSOLUTION AND RECEIVERSHIP. 



500. 5220. Two-thirds vote required 

for liquidation. 

501. 5221. Notice of voluntary liqui- 

dation. 

502. 5222. Deposit of lawful money to 

redeem circulation. 

503. 5223. No deposit required for 

consolidation. 
503a. Act November 7, 1918. Consoli- 
dation of national banks. 

504. 5224. Reassignment of bonds and 

redemption of notes of 
liquidating banks. 

505. Act June 20, 1874. Duty of 

Treasurer, Assistant 
Treasurer, etc., to return 
notes of failed or liquidat- 
ing banks to Treasury for 
redemption. 

506. 5225. Destruction of redeemed 

notes. 

507. 5226. Protest of bank circulation. 

508. 5227. Bonds forfeited if circula- 

tion is dishonored. Ex- 
amination by special 
agent. 

509. 5228. Suspension of business 

after default. 

510. 5229. Notice to present circula- 

tion for redemption. 
Cancellation of bonds. 

511. 5230. Sale of bonds at auction. 

First lien for redeeming 
circulation. 

512. 5231. Bonds may be sold at pri- 

vate sale. 

513. 5232. Disposal of redeemed 

notes. Regulations for 
redemption records. 



514. 5233. Redeemed notes to be can- 

celed. 

515. 5234. Appointment and duties of 

receivers. 

516. 5235. Notice to creditors of in- 

solvent banks to present 
claims. 

517. 5236. Dividends. Distribution of 

assets of insolvent banks. 

518. 5237. When bank may enjoin fur- 

ther proceedings. 

519. 5238. Fees and expenses. 

520. Act June 30, 1876. When re- 

ceiver may be appointed. 

521. Act June 30, 1876. Creditor's 

bill against shareholders. 

522. Act June 30, 1876, as amended 

1892. 1897. Appoint- 
ment, qualification, and 
duties of shareholders' 
agent. 

523. Act March 29, 1886. Receiver 

may purchase property to 
protect his tru^t. 

524. Act March 29, 1886. Approval of 

request. 

525. Act March 29, 1886. Payment. 

526. 5239. Penalty for violation of 

this title. Forfeiture of 
charter. Individual lia- 
bility of directors. 

527. 5240. Appointment of examiners. 

Compensation. 

528. 5241. Limitation of visitorial 

powers. 

529. 5242. Transfers, when void. Il- 

legal prefei-ence of credi- 
tors. 

530. 5243. Use of the title "Na- 

tional." 



TWO-THIRDS VOTE REQUIRED FOR LIQUIDATION. 

500. Sec. 5220.— Any association may go into liqnida- ^^^^^ i^°\ol\ 
tion and be closed by the vote of its shareholders o^^i^g|'iat'L"ii2^^ 
two-thirds of its stock. 

Note. — For enforcement of shareholders' liability when bank is 
in liquidation see act of June 30, 1876, following Revised Statutes, 
5238. 



NOTICE OF VOLUNTARY LIQUIDATION. 

501. Sec. 5221. — AVhenever a vote is taken to go into 1 864, c.""%6! 
liquidation it shall be the duty of the board of directors 1^^^^ j'^-=„p^ 
to cause notice of this fact to be certified, under the seal 



an 



100 DISSOLUTION AND KECEIVEESHIP. 

of the association, by its president or cashier, to the 
Comptroller of the Currency, and publication thereof to 
be made for a period of two months in a newspaper pub- 
lished in the city of New York, and also in a newspaper 
published in the city or town in which the association is 
located, or if no newspaper is there published, then in the 
newspaper published nearest thereto, that the association 
is closing up its affairs, and notifying the holders of its 
notes and other creditors to present the notes and other 
claims against the association for payment. 

DEPOSIT OF LAWFUL MONET TO REDEEM CIRCULATION. 

Act June 3. 502. Sec. 5222. — Within six months from the date of 

sec^s*' 42, ■43^1 the vote to go into liquidation, the association shall de- 

13^ Stat. L-. posit with the Treasurer of the United States, lawful 

Act July 14, money of the United States sufficient to redeem all its 

ifi^^'stat. '^L.', outstanding circulation. The Treasurer shall execute 

2'^-*- duplicate receipts for money thus desposited and deliver 

one to the association and the other to the Comptroller of 

the Currency, stating the amount received by him, and the 

purpose for which it has been received; and the money 

shall be paid into the Treasury of the United States, and 

placed to the credit of such association upon redemption 

account. 

NO DEPOSIT REQUIRED FOR CONSOLIDATION. 

1870* c"^^26¥' .^^^' ^^^- 5223.— An association which is in good faith 
16 Stat. L.', winding up its business for the purpose of consolidating 
^^*" with another association shall not be required to deposit 

lawful money for its outstanding circulation; but its as- 
sets and liabilities shall be reported by the association 
with which it is in process of consolidation. 

CONSOLIDATION OF NATIONAL BANKS. 

1918.* ^*^ ^' 503a. — That any two or more national banking associa- 
tions located within the same county, city, town, or village 
may, with the approval of the Comptroller of the Cur- 
rency, consolidate into one association under the charter 
of either existing banks, on such terms and conditions as 
may be lawfully agreed upon by a majority of the board 
of directors of each association proposing to consolidate, 
and be ratified and confirmed by the affirmative vote of 
the shareholders of each such association owning at least 
two-thirds of its capital stock outstanding, at a meeting 
to be held on the call of the directors after publishing 
notice of the time, place, and object of the meeting for 
four consecutive weeks in some newspaper published in 
the place where the said association is located, and if no 
newspaper is published in the place, then in a paper 
published nearest thereto, and after sending such notice to 
each shareholder of record by registered mail at least ten 
days prior to said meeting : Provided, That the capital 
stock of such consolidated association shall not be less 



DISSOLUnON AND RECEIVERSHIP. 101 

than that required under existing law for the organization 
of a national bank in the place in which it is located: 
And provided further^ That when such consolidation 
shall have been effected and approved by the comptroller 
any shareholder of either of the associations so consoli- 
dated who has not voted for such consolidation may give 
notice to the directors of the association in which he is 
interested within twenty days from the date of the cer- 
tificate of approval of the comptroller that he dissents 
from the plan of consolidation as adopted and approved, 
whereupon he shall be entitled to receive the value of the 
shares so held by him, to be ascertained by an appraisal 
made by a committee of three persons, one to be selected 
by the shareholder, one by the directors, and the third by 
the two so chosen ; and in case the value so fixed shall not 
be satisfactory to the shareholder he may within five days 
after being notified of the appraisal appeal to the Comp- 
troller of the Currency, who shall cause a reappraisal to 
be made, which shall be final and binding; and if said 
reappraisal shall exceed the value fixed by said committee, 
the bank shall pay the expenses of the reappraisal ; other- 
wise the appellant shall pay said expenses, and the value 
so ascertained and determined shall be deemed to be a 
debt due and be forthwith paid to said shareholder from 
said bank, and the share so paid shall be surrendered and 
after due notice sold at public auction within thirty days 
after the final appraisement provided for in this Act. 

Sec. 2. That associations consolidating with another 
association under the provisions of this Act shall not be 
required to deposit lawful money for their outstanding 
circulation, but their assets and liabilities shall be re- 
ported by the association with which they have consoli- 
dated. And all the rights, franchises, and interests of the 
said national bank so consolidated in and to every species 
of property, personal and mixed, and choses in action 
thereto belonging, shall be deemed to be transferred to 
and vested in such national bank into which it is con- 
solidated without any deed or other transfer, and the 
said consolidated national bank shall hold and enjoy the 
same and all rights of property, franchises, and interests 
in the same manner and to the same extent as was held 
and enjoyed by the national bank so consolidated there- 
with. 

REASSIGNMENT OF BONDS AND REDEMPTION OF NOTES 
OF LIQUIDATING BANKS. 

504. Sec. 5224 [as amended 1875]. — Whenever a suffi- Act June ^, 
cient deposit of lawful money to redeem the outstanding s?c^.' 42; ^Ts 
circulation of an association proposing to close its busi- ^*\^(;f ^ivb ^is 
ncss has been made, the bonds deposited by the associa- isVs. ' c. so! 
tion to secure payment of its notes shall be reassigned to 320. ^*'^'' ^" 
it, in the manner prescribed by section fifty-one hundred 
and sixty-two. And thereafter the association and its 



102 DISSOLUTION AND RECEIVERSHIP. 

shareholders shall stand discharged from all liabilities 
upon the circulating notes, and those notes shall be re- 
deemed at the Treasury of the United States. And if 
any such bank shall fail to make the deposit and take up 
its bonds for thirty days after the expiration of the time 
specified, the Comptroller of the Currency shall have 
power to sell the bonds pledged for the circulation of 
said bank, at public auction in New York City, and, after 
providing for the redemption and cancellation of said 
circulation and the necessary expenses of the sale, to 
pay over any balance remaining to the bank or its legal 
repress] tatives. 

DUTY OF TREASURER, ASSISTANT TREASURERS, ETC., TO 
RETURN NOTES OF FAILED OR LIQUIDATING BANKS TO 
TREASURY FOR REDEMPTION. ACT JUNE 20, 1874. 

1874* c"°^343; 505. Sec. 8. — * * * And it shall be the duty of the 
L.^' i^2h ^^ ^*^** J^ I'easurer, assistant treasurers, designated depositaries, 
and national bank depositaries of the United States 
* * * to assort and return to the Treasury for re- 
demption the notes of such national banks as have failed, 
or gone into voluntary liquidation for the purpose of 
winding up their affairs, and of such as shall hereafter so 
fail or go into liquidation. 

DESTRUCTION OF REDEEMED NOTES. 

1864.* ?°'i06: 506. Sec. 5225 [as amended 1877].— Whenever the Treas- 
st\t" h.^112.^^^^^ ^^^^ redeemed any of the notes of an association 
Act. Feb. 27, which lias conmienced to close its affairs under the five 
Stat.' L.. 252. preceding sections, he shall cause the notes to be mu- 
tilated and charged to the redemption account of the 
association; and all notes so redeemed by the Treasurer 
shall, every three months, be certified to and [bmmedl 
in the manner prescribed in section fifty-one hundred and 
eighty -four. 

Note. — See act of June 23, 1874, following Revised Statutes, sec- 
tion 5184, directing that bank notes be macerated and not burned. 

PROTEST OF BANK CIRCULATION. 

507. Sec. 5226. — Whenever any national banking asso- 
1864* c"°%6' ciation fails to redeem in the lawful money of the United 
8 0.' 46; i:^ States any of its circulating notes, upon demand of pay- 
stat. L., 113. j^gj^^ j^jjy made during the usual hours of business, at the 
office of such association, or at its designated place of re- 
demption, the holder may cause the same to be protested, 
in one package, by a notary public, unless the president or 
cashier of the association whose notes are presented for 
payment, [or the president or cashier of the association at 
the place at which they are redeemahle'] offers to waive 
demand and notice of the protest, and, in pursuance of 



DISSOLUTION AND RECEIVERSHIP. 103 

such offer, makes, signs, and delivers to the party mak- 
ing such demand an admission, in writing, stating the 
time of the demand, the amount demanded, and the fact 
of the nonpayment thereof. The notary public, on mak- 
ing such protest, or upon receiving such admission, shall 
forthwith forward such admission or notice of protest to 
the Comptroller of the Currency, retaining a copy there- 
of. If, however, satisfactory proof is produced to the 
notary public that the payment of the notes demanded 
is restrained by order of any court of competent juris- 
diction, he shall not protest the same. When the holder 
of any notes causes more than one note or package to 
be protested on the same day, he shall not receive pay 
for more than one protest. 

Note. — Circulation redeemable only at Treasury or over own 
counter. Designated places of redemption have not existed since 
act June 20, 1874. (See note under paragraph 401, ante.) 

BONDS FORFEITED IF CIRCULATION IS DISHONORED. 
EXAMINATION BY SPECIAL AGENT. 

508. Sec. 5227. — On receiving notice that any national jg^c* June ^3. 
banking association has failed to redeem any of its circu- s e c' 47 ; 1^ 
lating notes, as specified in the preceding section, the ^*" ' ^ * 
Comptroller of the Currency, with the concurrence of the 
Secretary of the Treasury, may appoint a special agent, 

of whose appointment immediate notice shall be given to 
such association, who shall immediately proceed to ascer- 
tain whether it has refused to pay its circulating notes in 
the lawful money of the United States, when demanded, 
and shall report to the Comptroller the fact so ascer- 
tained. If, from such protest, and the report so made, 
the Comptroller is satisfied that such association has re- 
fused to pay its circulating notes and is in default, he 
shall, within thirty days after he has received notice of 
such failure, declare the bonds deposited by such associa- 
tion forfeited to the United States, and they shall there- 
upon be so forfeited. 

SUSPENSION OF BUSINESS AFTER DEFAULT. 

509. Sec. 5228 [as amended 1875].— After a default on jg^ct June^s. 
the part of an association to pay any of its circulating |ec.' ^6;^ja 
notes has been ascertained by the Comptroller, and notice ac? ' Feb. is, 
thereof has been given by him to the association, it shall ^fjf; L.,^32'0^^ 
not be lawful for the association suffering the same to 

pay out any of its notes, discount any notes or bills, or 
otherwise prosecute the business of banking, except to 
receive and safely keep money belonging to it, and to 
deliver special deposits. 



104 DISSOLUTION AND RECEIVERSHIP. 

NOTICE TO PRESENT CIRCULATION FOR REDEMPTION. 
CANCELLATION OF BONDS. 

Act June 3, g^Q gg^ 5229. — Immediately upon declaring the bonds 
Ift 47 ; 13 of an association forfeited for nonpayment of its notes, 
Stat. L.. 114. ^.j^g Comptroller shall give notice, in such manner as the 
Secretary of the Treasury shall, by general rules or other- 
wise, direct, to the holders of the circulating notes of such 
association, to present them for payment at the Treasury 
of the United States ; and the same shall be paid as pre- 
sented in lawful money of the United States, whereupon 
the Comptroller may, in his discretion, cancel an amount 
of bonds pledged by such association equal at current 
market rates, not exceeding par, to the notes paid. 

S\LE OF BONDS AT AUCTION. FIRST LIEN FOR REDEEM- 
ING CIRCULATION. 

Act June 3, 511. Scc. 5230. — Whenever the Comptroller has become 
ISs' 47, \*f: satisfied, by the protest or the waiver and admission 
13 ■ Stat. L.; specified in section fifty-two hundred and twenty-six, or 
^^*' by the report provided for in section fifty-two hundred 

and twenty-seven, that any association has refused to 
pay its circulating notes, he may, instead of canceling its 
bonds, cause so much of them as may be necessary to 
redeem its outstanding notes to be sold at public auction 
in the city of New York, after giving thirty days' notice 
of such sale to the association. For any deficiency in the 
proceeds of all the bonds of an association, when thus 
sold, to reimburse to the United States the amount 
expended in paying the circulating notes of the associa- 
tion, the United States shall have a paramount lien upon 
all its assets ; and such deficiency shall be made good out 
of such assets in preference to any and all other claims 
whatsoever, except the necessary costs and expenses of 
administering the same. 

BONDS MAY BE SOLD AT PRIYATE SALE. 

Act June 3. 512. Sec. 5231. — The Comptroller may, if he deems it 
ll^c.' 49 ; ^*\*:i for the interest of the United States, sell at private sale 
Stat. L., 114. ^j^y q£ ^YiQ bonds of an association shown to have made 
default in paying its notes, and receive therefor either 
money or the circulating notes of the association. But 
no such bonds shall be sold by private sale for less than 
par, nor for less than the market value thereof at the 
time of sale; and no sales of any such bonds, either public 
or private, shall be complete until the transfer of the 
bonds shall have been made with the formalities pre- 
scribed by sections fifty-one hundred and sixty-two, 
fifty-one hundred and sixty-three, and fifty-one hundred 
and sixty -four. 



DISSOLUTION AND RECEIVERSHIP. 105 

DISPOSAL OF REDEEMED NOTES; REGULATIONS FOR 
REDEMPTION RECORDS. 

513. Sec. 5232. — The Secretary of the Treasury may, j^Act Janets, 
from time to time, make such regulations respecting the s e c' 47 ; 1^ 
disposition to be made of circulating notes after presen- ^*'**- ^' ^^■*- 
tation at the Treasury of the United States for payment, 

and respecting the perpetuation of the evidence of the 
payment thereof, as may seem to him proper. 

REDEEMED NOTES TO BE CANCELED. 

514. Sec. 5233. — All notes of national banking associa- ^g^ct J"°e 3. 
tions presented at the Treasury of the United States for s e c' 47 ; 1^ 
payment shall, on being paid, be canceled. ^- ^^■*- 

APPOINTMENT AND DUTIES OF RECEIVERS. 

515. Sec. 5234. — On becoming satisfied, as specified in ^g-^^t J"°e 3, 
sections fiftv-two hundred and twenty-six and fifty-two s e c' 56 ; 13 
hundred and twenty-seven, that any association has re- 
fused to pay its circulating notes as therein mentioned, 

and is in default, the Comptroller of the Currenc}' may 
forthwith appoint a receiver, and require of him such 
bond and security as he deems proper. Such receiver, 
under the direction of the Comptroller, shall take pos- 
session of the books, records, and assets of every descrip- 
tion of such association, collect all debts, dues, and claims 
belonging to it, and, upon the order of a court of record 
of competent jurisdiction, may sell or compound all bad 
or doubtful debts, and, on a like. order, may sell all the 
real and personal property of such association, on such 
terms as the court shall direct; and may, if necessarj' to 
pay the debts of such association, enforce the individual 
liability of the stockholders. Such receiver shall pay 
over all money so made to the Treasurer of the United 
States, subject to the order of the Comptroller, and also 
make report to the Comptroller of all his acts and pro- 
ceedings. Provided^ That the Comptroller may, if he Act May 15, 
deems proper, deposit any of the mone}' so made in any ]^_]\l '^^ ^^^^ 
regular Govermnent depositary, or in any State or 
national bank either of the city or town in which the 
insolvent bank was located, or of a city or town as adja- 
cent thereto as practicable; if such deposit is made he 
shall require the depositary to deposit United States 
bonds or other satisfactory' securities with the Treasurer 
of the United States for the safe-keeping and prompt 
payment of the money so deposited. Such depositary 
shall pay upon such money interest at such rate as the 
Comptroller may prescribe, not less, however, than two 
per centum per annum upon the average monthly amount 
of such deposits. 

NoTEL — Other provisions autliorizinjr the appointment of re- 
ceivers of national banks and relatini: to powers and duties of 
receivers and agents will be found in the act of June 30, 187G, as 



•)o 



106 DISSOLUTION AND RECER^RSHIP. 

amended August 3, 1S92, and March 2, 1S97, and the act of March 
29, 1886. Both these acts are set forth following section 5238; 
Revised Statutes. 

A receiver may also be appointed, under the provisions of sec- 
tion 5234 of the Revised Statutes of the United States, for the 
following violations of law : 

Where the capital stock of a national bank has not been fully 
paid in and it is thus reduced below the legal minimum and 
remains so for thirtj' days. (Sec. 5141, R. S.) 

For failure to make good the lawful money reserve within 
thirty days after notice. (Sec. 5191, R. S.) 

Where a bank purchases or acquires its own stock to prevent 
loss upon a debt previously contracted in good faith, and the same 
Is not sold or disposed of within six months from the time of its 
purchase. (Sec. 5201, R. S.) 

For failure to make good any impairment in its capital stock 
and refusing to go into liquidation within three months after 
receiving notice. (Sec. 5205, R. S.) 

For false certification of checks by any officer, clerk, or agent. 
(Sec. 5208, R. S.) 

NOTICE TO CKEDITORS OF INSOLTENT BANKS TO PRE- 
SENT CLAIMS. 

Act June 3, 516. Scc. 5235. — The Comptroller shall, upon appoint- 

1864, c. 106,. . J.- J. I • I, 1 1- 

B e c. 50 ; 13 iiig a receiver, cause notice to be given, by advertisement 
Stat. L., 114. ^^ such newspapers as he may direct, for three consecu- 
tive months, calling on all persons who may have claims 
against such association to present the same, and to make 
legal proof thereof. 

DITIDENDS; DISTRIBUTION OF ASSETS OF INSOLTENT 
BANKS. 

1864^ c"°*i06; 517. Sec. 5236.— From time to time, after full provision 
se c.' 50 ; 13 has been first made for refunding to the United States 
^ * " ■ any deficiency in redeeming the notes of such association, 
the Comptroller shall make a ratable dividend of the 
money so paid over to him by such receiver on all such 
claims as may have been proved to his satisfaction or ad- 
judicated in a court of competent jurisdiction, and, as 
the proceeds of the assets of such association are paid 
over to him, shall make further dividends on all claims 
previously proved or adjudicated; and the remainder of 
the proceeds, if any, shall be paid over to the shareholders 
of such association or their legal representatives, in pro- 
portion to the stock by them respectively held. 

>VHEN BANK MAY ENJOIN FURTHER rROCEEIUNGS. 

1804* c"°^i06' ^^^' ^®^' 5^^"^- — Whenever an association against wliich 
sec' 50; 1.3 proceedings have been instituted, on account of any al- 
stat. L., 114. igggd refusal to redeem its circulating notes as aforesaid, 
denies having failed to do so, it may, at any time within 
ten days after it has been notified of the appointment of 
an agent, as provided in section fifty-two hundred and 
twenty-seven, apply to the nearest circuit, or district, or 
Territorial court of the United States to enjoin further 
proceedings in the premises; and sucli court, after citing 



DISSOLUTION AND RECEIVERSHIP. 107 

the Comptroller of the Currency to show cause why fur- 
ther proceedings should not be enjoined, and after the 
decision of the court or finding of a jury that such asso- 
ciation has not refused to redeem its circulating notes, 
wiien legally presented, in the lawful money of the 
United States, shall make an order enjoining the Comp- 
troller, and any receiver acting under his direction, from 
all further proceedings on account of such alleged refusal. 

Note. — See also sections 24, judiciary act passed March 31, 1911, 
and 73G, Revised Statutes, paragraphs 701 and 702, post. 

FEES AND EXPENSES. 

519. Sec. 5238.— All fees for protesting the notes issued ^g^ct June^l. 
by any national banking association shall be paid by the sec' si; li 
person j)rocuring the protest to be made, and such asso- ^^^^- ^' ^^'^^ 
ciation shall be liable therefor ; but no part of the bonds 
deposited by such association shall be applied to the pay- 
ment of such fees. All expenses of any preliminary or 

other examinations into the condition of any association 
shall be paid by such association. All expenses of any 
receivership shall be paid out of the assets of such asso- 
ciation before distribution of the proceeds thereof. 

WHEN RECEIVER MAY BE APPOINTED. ACT JUNE 30, 

1876. 

520. Section 1. — That whenever any national banking ^g^g* "'c'l^^iel 
association shall be dissolved, and its rights, privileges, sec- 1: i9 stat! 
and franchises declared forfeited, as prescribed in section '' 
fifty-two hundred and thirty-nine of the Revised Statutes 

of the United States, or whenever any creditor of any 
national banking association shall have obtained a judg- 
ment against it in any court of record, and made appli- 
cation, accompanied by a certificate from the clerk of the 
court stating that such judgment has been rendered and 
has remained unpaid for the space of thirty clays, or 
whenever the Comptroller shall become satisfied of the 
insolvency of a national banking association, he may, 
after due examination of its affairs, in either case, appoint 
a receiver, who shall proceed to close up such association, 
and enforce the personal liability of the shareholders, as 
provided in section fifty-tw^o hundred and thirty-four of 
said statutes. 

CREDITOR'S BILL AGAINST SHAREHOLDERS. ACT JUNE 
30, 1876. 

521. Sec. 2. — That when any national banking associa- Act June ^o, 
tion shall have gone into liquidation under the provisions sec. 2; i"9 stat! 
of section five thousand two hundred and tAventy of ^•' ^^• 

said statutes, the individual liability of the shareholders 
provided for by section fifty-one hundred and fifty-one 
of said statutes may be enforced by any creditor of such 
association, by bill in equity, in the nature of a creditor's 



108 DISSOLUTION AND RECEIVERSHIP. 

bill, brought by such creditor on behalf of himself and of 
all other creditors of the association, against the share- 
holders thereof, in any court of the United States having 
original jurisdiction in equity for the district in which 
such association may have been located or established. 

APP0INT3IENT, QUALIFICATION, AXD DUTIES OF SHARE- 
HOU)EES' AGENT. ACT JUNE 30, 1876, AS AMENDED 
1892, 1897. 

Act June 30, 522. Sec. 3. — That whenever any association shall have 
sec.^3 ; 19 stlt! been or shall be placed in the hands of a receiver, as pro- 
amended' au-^ '^'^^^^^^ i^ scction fifty-two hundred and thirty-four and 
itat^^L^' 34"?°^^^^^ sections of the Revised Statutes of the United 
and' Mar/ 2^ States, and when, as provided in section fifty-two hun- 
iff 6odi^ ^^^' ^^Gcl and thirty-six thereof, the Comptroller of the Cur- 
rency' shall have paid to each and every creditor of such 
association, not including shareholders who are creditors 
of such association, whose claim or claims as such creditor 
shall have been proved or allowed as therein prescribed, 
the full amount of such claims, and all expenses of the 
receivership and the redemption of the circulating notes 
of such association shall have been provided for by de- 
positing lawful mone}' of the United States with the 
Treasurer of the United States, the Comptroller of the 
Currency shall call a meeting of the shareholders of such 
association by giving notice thereof for thirty days m a 
newspaper published in the town, city, or county where 
the business of such association was carried on, or if no 
newspaper is there published, in the newspaper published 
nearest thereto. At such meeting the shareholders shall 
determine whether the receiver ^hall be continued and 
shall wind up the affairs of such association, or whether 
an agent shall be elected for that purpose, and in so de- 
termining the said shareholders shall vote by ballot, in 
person or by proxy, each share of stock entitling the 
holder to one vote, and the majority of the stock in value 
and number of shares shall be necessary to determine 
whether the said receiver shall be continued, or whether 
an agent shall be elected. In case such majority shall 
determine that the said receiver shall be continued, the 
said receiver shall thereupon proceed with the execution 
of his trust, and shall sell, dispose of. or otherwise collect 
the assets of the said association, and shall possess all the 
powers and authority, and be subject to all the duties and 
liabilities originally conferred or imposed upon him by his 
appointment as such receiver, so far as the same remain 
applicable. In case the said meeting shall, by the vote 
of a majority of the stock in value and number of shares, 
determine that an agent shall be elected, the said meeting 
shall thereupon proceed to elect an agent, voting by bal- 
lot, in person or by proxy, each share of stock entitling 
the holder to one vote, and the person who shall receive 
votes representing at least a majority of stock in value 



DISSOLUTION AND RECEIVERSHIP. 109 

and number shall be declared the agent for the purposes 
hereinafter provided; and whenever any of the share- 
holders of the association shall, after the election of such 
agent, have executed and filed a bond to the satisfaction 
of the Comptroller of the Currency, conditioned for tlie 
payment and discharge in full of each and every claim 
that may thereafter be proved and allowed by and before 
a competent court, and for the faithful performance of 
all and singular the duties of such trust, the Comptroller 
and the receiver shall thereupon transfer and deliver to 
such agent all the undivided or uncollected or other as- 
sets of such association then remaining in the hands or 
subject to the order and control of said Comptroller and 
said receiver, or either of them ; and for this purpose said 
Comptroller and said receiver are hereby severally em- 
powered and directed to execute any deed, assignment, 
transfer, or other instrument in writing that may be nec- 
essary and proper; and upon the execution and delivery 
of such instrument to the said agent the said Comptroller 
and the said receiver shall by virtue of this act be dis- 
charged from any and all liabilities to such association 
and to each and all the creditors and shareholders thereof. 
Upon receiving such deed, assignment, transfer, or 
other instrument the person elected such agent shall hold, 
control, and dispose of the assets and property of such 
association which he may receive under the terms hereof 
for the benefit of the shareholders of such association, 
and he may, in his own name, or in the name of such 
association, sue and be sued and do all other lawful acts 
and things necessary to finally settle and distribute the 
assets and property in his hands, and may sell, compro- 
mise, or compound the debts due to such association, with 
the consent and approval of the circuit or district court 
of the United States for the district where the business of 
such association was carried on, and shall at the conclu- 
sion of his tcust render to such district or circuit court a 
full account of all his proceedings, receipts, and expendi- 
tures as such agent, which court shall, upon due notice, 
settle and adjust such accounts and discharge said agent 
and the sureties upon said bond. And in case any such 
agent so elected shall refuse to serve, or die, resign, or 
be removed, any shareholder may call a meeting of the 
shareholders of such association in the town, city, or vil- 
lage where the business of the said association was car- 
ried on, by giving notice thereof for thirty . days in a 
newspaper published in said town, city, or village, or if 
no newspaper is there published, in the newspaper pub- 
lished nearest thereto, at which meeting the shareholders 
shall elect an agent, voting by ballot, in person or by 
proxy, each share of stock entitling the holder to one 
vote, and when such agent shall have received votes rep- 
resenting at least a majority of the stock in value and 
number of shares, and shall have executed a bond to the 



110 DISSOLUTION AlTD KECErVT^ESHTP. 

shareholders conditioned for the faithful performance 
of his duties, in the penalty fixed by the shareholders at 
said meeting, with two sureties, to be approyed by a 
judge of a court of record, and file said bond in the office 
of the clerk of a court of record in the county where the 
business of said association was carried on, he shall have 
all the rights, powers, and duties of the agent first elected 
as hereinbefore provided. At any meeting held as here- 
inbefore provided administrators or executors of de- 
ceased shareholders may act and sign as the decedent 
might have done if living, and guardians of minors and 
trustees of other persons may so act and sign for their 
ward or wards or cestui que trust. The proceeds of the 
assets or property of any such association which may be 
undistributed at the time of such meeting or may be sub- 
sequently received shall be distributed as follows: 

First. To pay the expenses of the execution of the 
trust to the date of such payment. 

Second. To repay any amount or amounts which have 
been paid in by any shareholder or shareholders of such 
association upon and by reason of any and all assess- 
ments made upon the stock of such association by the 
order of the Comptroller of the Currency in accordance 
with the provisions of the statutes of the United States; 
and 

Third. The balance ratably among such stockholders, 
in proportion to the number of shares held and owned by 
each. Such distribution shall be made from time to time 
as the proceeds shall be received and as shall be deemed 
advisable by the said Comptroller or said agent. 

Note. — Other sections of act June 30, 1876: 
Section 4 amends Revised Statutes, 5205. 
Section 5 relates to counterfeit notes. 

Section 6 relates to savings banks and trust companies, organ- 
ized under act of Congress. 

RECEITER MAY PURCHASE PROPERTY TO PROTECT HIS 
TRUST. ACT MARCH 29, 1886. 

]886*"c^*"'sec' ^^^' ^^^' ^' — '^^at whenever the receiver of any na- 
i; 24 st'at. L.^tional bank duly appointed by the Comptroller of the 
*• Currency, and who shall have duly qualified and entered 

upon the discharge of his trust, shall find it in his opinion 
necessary, in order to fully protect and benefit his said 
trust, to the extent of any and all equities that such trust 
may have in any property, real or personal, by reason 
of any bond, mortgage, assignment, or other proper legal 
claim attaching thereto, and which said property is to be 
sold under any execution, decree of foreclosure, or proper 
order of any court of jurisdiction, he may certify the 
facts in the case, together with his opinion as to the value 
of the property to be sold, and the value of the equity his 
said trust may have in the same, to the Comptroller of 
the Currency, together with a request for the right and 



DISSOLUTION" AND EECEIVERSHIP. Ill 

authority to use and employ so much of the money of 
said trust as may be necessary to purchase such property 
at such sale. 

APPROVAL OF REQUEST. ACT MARCH 29, 1S86. 

524. Sec. 2. — That such request, if approved by the Act. Mar 29. 
Comptroller of the Currency, shall be, together with the 2? 24*'sS.T; 
certificate of facts in the case, and his recommendation as ®' 

to the amount of money which, in his judgment, should be • 
so used and employed, submitted to the Secretary of the 
Treasury, and if the same shall likewise be approved by 
him, the request shall be by the Comptroller of the Cur- 
rency allowed, and notice thereof, with copies of the re- 
quest, certificate of facts, and indorsement of approvals, 
shall be filed with the Treasurer of the United States. 

PAYMENT. ACT MARCH 29, 1886. 

525. Sec. 3. — That whenever any such request shall be^o^^* '^H-^ 

n 1 1 •!/> -Ill • -1 /-^ n /. looo, C. 28, sec. 

allowed as herembefore provided, the said Comptroller of 3 ; 24 stat. l., 
the Currency shall be, and is, empowered to draw upon ^' 
and from such funds of any such trust as may be depos- 
ited with the Treasurer of the United States for the 
benefit of the bank in interest, to the amount as may be 
recommended and allowed and for the purpose for which 
such allowance was made: Provided, however, That all 
payments to be made for or on account of the purchase of 
any such property and under any such allowance shall be 
made by the Comptroller of the Currency direct, with the 
approval of the Secretary of the Treasury, for such pur- 
pose only and in such manner as he may determine and 
order. 

PENALTY FOR VIOLATION OF THIS TITLE; FORFEITURE 
OF CHARTER; INDIVIDUAL LIABILITY OF DIRECTORS. 

526. Sec. 5239.— If the directors of any national bank- jg^ct June ^3, 
ing association shall knowingly violate, or knowingly s e c' 53 ; 13 
permit any of the officers, agents, or servants of the asso- ^*^*' ^' ^^^' 
ciation to violate any of the provisions of this title, all 

the rights, privileges, and franchises of the association 
shall be thereby forfeited. Such violation shall, how- 
ever,_be determined and adjudged by a proper circuit, 
district, or Territorial court of the United State.s, in a 
suit brought for that purpose by the Comptroller of the 
Currency, in his own name, before the association shall be 
declared dissolved. And in cases of such violation, every 
director who participated in or assented to the same shall 
be held liable in his personal and individual capacity for 
all damages which the association, its shareholders, or any 
other person, shall have sustained in consequence of such 
violation. 



112 DISSOLUTION AITD RECEIYERSHIP. 

APPOINTMENT OF EXAMINERS, COMPENSATION. 

186? c"°%6: 527. Sec. 5240 [as amended 1913].— The Comptroller of 
sec. ' 54 ; 13 the Currency, with the approval of the Secretary of the 
^* Act ^Feb/ 19, Treasury, shall appoint examiners, who shall examine 
stat'L ^3^2^ ■^^ ^^'®^y member bank at least twice in each calendar year 
Act Dec. 23, and oftener if considered necessary : Provided, however, 
IV' 'stiu L.', That the Federal Reserve Board may authorize exam- 
2'^i- ination by the State authorities to be accepted in the 

case of State banks and trust companies and may at any 
time direct the holding of a special examination of 
State banks or trust companies that are stockholders in 
any Federal reserve bank. The examiner making the 
examination of any national bank, or of any other mem- 
ber bank, shall have power to make a thorough exami- 
nation of all the affairs of the bank, and in doing so he 
shall have power to administer oaths and to examine 
any of the officers and agents thereof under oath and 
shall make a full and detailed report of the condition of 
said bank to the Comptroller of the Currency. 

The Federal Reserve Board, upon the recommendation 
of the Comptroller of the Currency, shall fix the salaries 
of all oank examiners and make report thereof to Con- 
gress. The expense of the examinations herein provided 
for shall be assessed by the Comptroller of the Currency 
upon the banks examined in proportion to assets or re- 
sources held by the banks upon the dates of examination 
of the various banks. 

In addition to the examinations made and conducted 
by the Comptroller of the Currency, every Federal reserve 
bank may, with the approval of the Federal reserve agent 
or the Federal Reserve Board, provide for special exami- 
nation of member banks within its district. The expense 
of such examinations shall be borne by the bank ex- 
amined. Such examinations shall be so conducted as to 
inform the Federal reserve bank of the condition of its 
member banks and of the lines of credit which are being 
extended by them. Every Federal reserve bank shall at 
all times furnish to the Federal Reserve Board such in- 
formation as may be demanded concerning the condition 
of any member bank within the district of the said 
Federal reserve bank. 

No bank shall be subject to any visitatorial powers 
other than such as are authorized by law, or vested in 
the courts of justice or such as shall be or shall have 
been exercised or directed by Congress, or by either Hou^^^e 
thereof or by any committee of Congress or of either 
House duly authorized. 

The Federal Reserve Board shall, at least once each 
year, order an examination of each Federal reserve bank, 
and upon joint application of ten member banks the 
Federal Reserve Board shall order a special examination 
and report of the condition of any Federal reserve bank. 



DISSOLUTION AND RECEIVERSHIP. 113 

LIMITATION OF TISITORIAL POWERS. 

528. Sec. 5241. — No association shall be subject to any j^^^t c"°%6' 
visitorial powers other than such as are authorized by sec' 54: i.^ 
this Title, or are vested in the courts of justice. ^***' ^" ^^® 

Note. — See also the fourth paragraph in section 5240, Immedi- 
ately preceding. 

TRANSFERS. WHEN TOID; ILLEGAL PREFERENCE OP 
CREDITORS. 

529. Sec. 5242. — All transfers of the notes, bonds, bills ^^Act J"°'^j^3. 
of exchange, or other evidences of debt owing to anyseV 52; is 
national banking association, or of deposits to its credit ;^^^^- ^" •^^^• 
all assignments of mortgages, sureties on real estate, or 

of judgments or decrees in its favor; all deposits of 
money, bullion, or other valuable thing for its use, or for 
the use of any of its shareholders or creditors; and all 
payments of money to either, made after the commission 
of an act of insolvency, or in contemplation thereof, made 
with a view to prevent the application of its assets in the 
manner prescribed by this chapter, or with a view to the 
preference of one creditor to another, except in payment 
of its circulating notes, shall be utterh" null and void; 
and no attachment, injunction or execution, shall be is- 
sued against such association or its property before final 
judgment in any suit, action, or proceeding, in any State, 
county, or municipal court. 

USE OF THE TITLE " NATIONAL." 

530. Sec. 5243. — All banks not organized .and transact- Act Mar. 3, 
ing business under the national currency laws, or under gee. ^3 ; 17 s^tal' 
this Title, and all persons or corporations doing the busi- ^- ^<^3. 
ness of bankers, brokers, or savings institutions, except 

savings banks authorized b}^ Congress to use the word 
" national " as a part of their corporate name, are pro- 
hibited from using the word " national " as a portion of 
the name or title of such bank, corporation, firm, or 
partnership ; and any violation of this prohibition com- 
mitted after the third day of September, eighteen hun- 
dred and seventy-three, shall subject the party charge- 
able therewith tc a penalty of fifty dollars for each day 
during which it is committed or repeated. 

164312°— 20 S 



]^2.4 DISSOLUTION AUD fiECElVEBSHIP. 



FEDERAL RESERVE ACT. 



115 



CHAPTER VI. 



THE FEDERAL RESERVE ACT. 



As amended by the acts approved August 4 and August 15, 1914, 
March 3, 1915, September 7, 1916, June 21, 1917, and March 3, 
1919. 



600. 
601. 
602. 

602a. 
602b. 
602c. 
602cl. 
602e. 

602f. 



602g. 
60211. 



602i. 

602j. 
602k. 
6021. 

602m 
602n. 

603. 

604. 



604a. 
604b. 

604c. 

604(1. 
604e. 

604f. 



604g. 
604b. 



Title of act. 

Definition of terras. 

Federal reserve districts — or- 
ganization committee. 

Authority of committee. 

Acceptance of terms of act. 

Subscriptions to capital stock. 

Responsibility of shareholders. 

Failure of national banks to ac- 
cept terms of act — penalty. 

Failure of national banks to 
become member banks — pen- 
alty. 

Public subscriptions — when ac- 
cepted. 

Limit to stock held by any in- 
dividual copartnership or cor- 
poration other than a mem- 
ber bank. Public stock, how 
transferable. 

Allotment of stock to United 
States. 

Voting power. 

Transfer of stock. 

Minimum capital of Federal re- 
serve bank. 

Reserve cities, status of. 

Authority of organization com- 
mittee to employ assistants. 

Brandies of Federal reserve 
banks. 

Organization of Federal reserve 
banks. Application for stock 
by national banks. 

certificate. 
Federal reserve 



Organization 
Powers of 

banks. 
Directors of 

banks. 
Classification 



Federal reserve 



of 



directors, 
class A and class 



B 



class C direc- 
reserve agent, 



Election of 
directors. 

Appointment of 
tors. Federal 
duties of. 

Compensation of directors. 

Organization of Federal reserve 
banks. Authority of organi- 
zation committee. 



604i. First meeting of directors. Des- 
ignation of terms of office. 

605. Increase and decrease of capital 
stock. 

605a. Stock not transferable. 

605b. Increase of capital stock. 

605c. Applications for capital stock. 

605d. Certificate of increase in stock 
of Federal reserve bank. 

605e. Reduction of capital stock. 

006. Insolvency of member bank. 

(JU~. Divisioa of earnings. 

607a. Tax es:emptions. 

608. Conversion of State banks into 

national banks. 

609. State banks may subscribe. 
609a. Applications for membership. 
G09b. Regulations and restrictions. 
609c. Member banks required to make 

reports to Federal Reserve 
Board and subject to exami- 
nation by examiners ap- 
pointed by the board and such 
banks' ofliicers, agents, and em- 
ployees subject to penalties of 
section 5209. 

609d. Failure to comply with regula- 
tions — penalty. 

609e. Withdrawal from membership 
in Federal reserve bank by 
State bank or trust company. 

609f. Amount of capital required to 
enable State bank to become 
member bank. 

609g. Rights, powers, and liabilities 
of State banks which Itoconie 
member banks. 

610. Appointment, compensation, and 

qualification of members of 
Federal Reserve Board. 

610a. Governor and vice governor; 
officers; qualification of mem- 
bers. 

610b. Provision for expenses. 

610c. First meeting of board : Secre- 
tary of Treasury chairman of 
board. 

117 



118 



THE FEDERAL RESERVE ACT. 



610d. Member of Federal Reserve 
Board not to be officer, direc- 
tor, or stockholder in any 
banking institution or trust 
company. 

610e. Vacancies on board — how filled. 

610f. Powers of Secretai-y of Treas- 
ury. 

610g. Federal Reserve Board to make 
annual report to Speaker of 
the House of Representatives. 

610h. Comptroller of the Currency. 

611. Powers of Federal Reserve 

Board. 

611a. Examination of books of Fed- 
eral reserve banks and mem- 
ber banks. Board may re- 
quire reports. 

611b. Rediscounts. 

611e. Suspension of reserve require- 
ments. 

611 d. Issue and retirement of Fed- 
eral reserve notes. 

611e. Reserve cities. 

611f. Suspension or removal of offi- 
cer or director of a Federal 
reserve bank. 

611g. Writing off doubtful or worth- 
less assets. 

611h. Suspension of operations of 
Federal reserve bank. 

611i. Requirement of bonds from 
Federal reserve agents and 
authority to make necessary 
regulations under this act. 

611j. General supervision. 

611k. Permit to national banks to act 
as trustee, executor, admin- 
istrator, or registrar of stocks 
and bonds. 

6111. Employment of attorneys, 
clerks, etc., and provisions for 
payment of salaries. 

611m. Discount by Federal reserve 
bank of paper secured by 
United States bonds issued 
since April 24, 1917. 

612. Federal ad\isory council. 
612a. Powers of Federal advisory 

council. 

613. Powers of Federal reserve 

banks. 

613a. Rediscounts — notes, drafts, and 
bills of exchange. 

613b. Acceptances and limitations 
thereof. 

613c. Exceptions as to limit of indebt- 
edness. Power to act as in- 
surance agent, as real-estate 
loan broker, and to accept 
drafts, etc. 

614. Open-market operations. 

615. Government deposits. 

616. Federal reserve notes author- 

ized. 
616a. Applications for Federal re.serve 
notes. — Collateral security. 



616b. Reserve requirements for Fed- 
eral reserve banks. 

616c. Issue and redemption of Fed- 
eral reserve notes. No Fed- 
eral reserve bank permitted to 
pay out notes issued through 
another Federal reserve bank. 

616d. Deposits of gold with Treasurer 
for redemption of Federal re- 
serve notes. 

616e. Federal Reserve Board may 
grant or reject application of 
Federal reserve bank for Fed- 
eral reserve notes. Federal 
reserve notes first lien on all 
the assets of the bank. 

616f. Reduction of note issues. 

61 6g. Substitution of collateral. 

616h. Preparation of Federal reserve 
notes. Plates and dies to be 
under control of Comptroller 
of Currency. Where notes are 
to be deposited. 

616i. Appropriation for expense of 
printing national - bank notes 
may be used for printing Fed- 
eral reserve notes. 

616j. When Federal reserve bank 
shall receive checks and drafts 
on deposit at par. 

616k. Charges for collection and for 
sale of exchange. 

6161. Federal Reserve Board may ex- 
ercise functions of a clearing 
house and may require Fed- 
eral reserve banks to exercise 
such functions. 

616m. Secretary of the Treasury to re- 
ceive deposits of gold coin or 
gold certificates with the 
Treasurer or Assistant Treas- 
urer of the United States when 
tendered by any Federal re- 
serve bank or Federal reserve 
agent for credit to its or his 
account with the Federal Re- 
serve Board. 

617. National banks not required to 

make deposit of United States 
bonds prior to commencement 
of business. 

618. Refunding bonds. Retirement 

of circulating notes. 

61Sa. Purchase of United States 
bonds by Federal reserve 
banks. 

618b. Issue of circulating notes to 
Federal reserve banks on se- 
curity of United States bonds. 
Circulating notes so issued 
obligations of Federal reserve 
bank, 

618c. Issue of one-year gold notes and 
3 per cent bonds of the United 
States in exchange for 2 per 
cent United States bonds. 



THE FEDERAL RESERVE ACT. 



119 



61 8d. Exchange of 3 per cent bonds 
for one-year gold notes. 

619. Bank reserves. Demand and 

time deposits defined. Reserve 
requirements, when effective. 

619a. Reserve requirements for banks 
not in reserve cities. 

619b. Reserve requirements for banks 
in reserve cities. 

619c. Reserve requirements for banks 
in central reserve cities. 

619d Member bank forbidden to keep 
on deposit with nonmember 
bank a sum in excess of 10 
per cent of its own capital and 
surplus or to secure discounts 
for nonmember bank. 

619e. Withdrawal of reserve by mem- 
ber bank. 

619f. Reserve requirement, how esti- 
mated. 

619g. Reserve requirements for na- 
tional banks located in Alaska 
or outside the continental 
United States. 

620. Redemption fund with Treas- 

urer not to be counted as re- 
serve. 

621. Bank examinations. Appoint- 

ment and powers of examin- 
ers. Acceptance of reports of 
examinations by State au- 
thority. 

621a. Salaries of bank examiners. 

621b. Examinations by Federal re- 
serve bank. 

621c. Examinations of Federal re- 
serve banks. 

622a. Member bank can not make loan 
or grant a gratuity to any 
national bank examiner. 

622b. National bank examiner can 
not perform any service for 
compensation for any bank or 



622c. 



622d. 



622e. 



622f. 



623. 

624. 
625. 
626. 



627. 



627a. 



628. 
629. 

630. 



officer. Examiner can not 
disclose the names of bor- 
rowers or collateral without 
first obtaining written con- 
sent of Comptroller. 

Penalty for oflicer, director, or 
employee of member bank 
who receives any commission 
or gift in connection with any 
loan. 

Purchase of securities or prop- 
erty from one of its directors, 
or sales to a director by a 
member bank. 

Rate of interest paid directors, 
officers, or employees not to 
exceed that paid to other de- 
positors. 

Penalty for violation of any of 
the provisions of section 22 
oi the Federal i-eserve act. 

Liability of stockholders of na- 
tional banks. 

Loans on real estate. 

Foreign branches. 

Repeal of provisions of law in- 
consistent with the provisions 
of the Federal reserve act. 

Act of May 30, 1908, extended 
to June 30, 1915. Reenact- 
ment of certain sections of 
Revised Statutes. 

Rate of taxation on circulating 
notes secured otherwise than 
by bonds of the United 
States. When Secretary of 
Treasury authorized to sus- 
pend limitations of act of 
May 30, 1908. 

Reduction of capital of national 
banks. 

Invalidation of clause, etc., in 
act not to invalidate remain- 
der of act. 

Reservation of right to amend 
or repeal. 



TITLE OF ACT. 

600. Be it enacted hy the Senate and House of Repre- ^^f ^|^; -^\ 
sentatives of the United States of America in Congress ^^ 'stat.' L.i 
assembled, That the short title of this Act shall be the" " 
" Federal Reserve Act." 



DEFINITION OF TERMS. 

601. Wherever the word "bank" is used in this Act, , Act. Dec. 23, 
the word shall be held to include State bank, bankinof.ss 'stat.' l.'. 
association, and trust company, except where national '-^^• 
banks or P ederal reserve banks are specifically referred to. 



120 THE FEDERAL RESERVE ACT. 

The terms "national bank" and "national banking 
association " used in this Act shall be held to be synony- 
mous and interchangeable. The term "member bank" 
shall be held to mean any national bank. State bank, or 
bank or trust company which has become a member of 
one of the reserve banks created by this Act. The term 
" board " shall be held to mean Federal Reserve Board ; 
the term " district " shall be held to mean Federal reserve 
district; the term "reserve bank" shall be held to mean 
Federal reserve bank. 

FEDERAL RESERYE DISTRICTS— ORG ANIZATIO COM- 
MITTEE. 

^Act Dec. 23, QQ2, Scc. 2. — As sooH as practicable, the Secretary of 
38 ■ stat.'^" L.; the Treasury, the Secretary of Agriculture and the 
^*^* Comptroller of the Currency, acting as "The Reserve 

Bank Organization Committee," shall designate not less 
than eight nor more than twelve cities to be known as 
Federal reserve cities, and shall divide the continental 
United States, excluding Alaska, into districts, each dis- 
trict to contain only one of such Federal reserve cities. 
The determination of said organization committee shall 
not be subject to review except by the Federal Reserve 
Board when organized: Provided, That the districts 
shall be apportioned with due regard to the convenience 
and customary course of business and shall not neces- 
sarily be coterminous with any State or States. The dis- 
tricts thus created may be readjusted and new districts 
may from time to time be created by the Federal Reserve 
Board, not to exceed twelve in all. Such districts shall 
be known as Federal reserve districts and may be desig- 
nated by number. A majority of the organization com- 
mittee shall constitute a quorum with authority to act. 

AUTHORITY OF COMMITTEE. 

Act Dec. 23, 602a. Said organization committee shall be authorized 
sl^^'sut?* L.'.to employ counsel and expert aid. to take testimony, to 
252. send for persons and papers, to administer oaths, and to 

make such investigation as may be deemed necessary by 
the said committee in determining the reserve districts 
and in designating the cities within such districts where 
such Federal reserve banks shall be severally located. 
The said committee shall supervise the organization in 
each of the cities designated of a Federal reserve bank, 
which shall include in its title the name of the city in 
which it is situated, as " Federal Reserve Bunk of 
Chicago." 

ACCEPTANCE OF TERMS OF ACT. 

Act Dec. 2a, 602b. Under regulations to be prescribed by the organi- 

38^%tur' L^^'^^^^^^ committee, every national banking association in 

252. ' "^ ■ "the TTnited States is hereby required, and every eligible 

bank in the United States and e\ery trust company 



nrE FEDERAL RESERVE ACT. 121 

within the District of Cohimbia, is hereby authorized to 
signify in writing, within sixty days after the passage of 
this act, its acceptance of the terms and provisions 
hereof, 

SUBSCRIPTIONS TO CAPITAL STOCK. 

602c. When the organization committee shall have,^A^^ct Dec. 23, 
designated the cities in which Federal reserve banks are 3.s stat." o..' 
to be organized, and fixed the geographical limits of the ^^^' 
Federal reserve districts, every national banking asso- 
ciation within that district shall be required within 
thirty days after notice from the organization commit- 
tee, to subscribe to the capital stock of such Federal 
reserve bank in a sum equal to six per centum of the 
paid-up capital stock and surplus of such bank, one- 
sixth of the subscription to be payable on call of the 
organization committee or of the Federal Reserve Board, 
one-sixth within three months and one-sixth within six 
months thereafter, and the remainder of the subscrip- 
tion, or any part thereof, shall be subject to call when 
deemed necessary by the Federal Reserve Board, said 
payments to be in gold or gold certificates. 

RESPONSIBILITY OF SHAREHOLDERS. 

602d. The shareholders of every Federal reserve bankjgfl^* sip- 'if: 
shall be held individually responsible, equally and rata- ^^ stat. L', 
bly, and not one for another, for all contracts, debts, and 
engagements of such bank to the extent of the amount 
of their subscriptions to such stock at the par value 
thereof in addition to the amount subscribed, whether 
such subscriptions have been paid up in whole or in part, 
under the provisions of this Act. 

FAILURE OF NATIONAL BANKS TO ACCEPT TERMS OF 
ACT— PENALTY. 

602e. Any national bank failing to signify its accept- jt)-^|* ^^^- ~h 
ance of the terms of this Act within the sixty days afore- ss^ 'stat. * £.! 
said, shall cease to act as a reserve agent, upon thirty ~^"' 
days' notice, to be given within the discretion of the sail 
organization committee or of the Federal Reserve Board. 

FAILURE OF NATIONAL BANKS TO BECOME MEMBER 
BANKS— PENALTY. 

602f. Should ajiy national banking association in the Act Dec. 2s, 
United States now organized fail within one year after as^'^'stltT' I', 
the passage of this Act to become a member bank or fail -^^• 
to comply with any of the provisions of this Act appli- 
cable thereto, all of the rights, privileges, and franchises 
)f such association granted to it under the nationai-bunk 
-let, or under the provisions of this Act, shall be tliereby 



122 THE FEDERAL KESER\^ ACT. 

forfeited. Any noncompliance with or violation of this 
Act shall, however, be determined and adjudged by any 
court of the United States of competent jurisdiction in a 
suit brought for that purpose in the district or territory 
in which such bank is located, under direction of the 
Federal Reserve Board, by the Comptroller of the Cur- 
rency in his own name before the association shall be 
declared dissolved. In cases of such noncompliance or 
violation, other than the failure to become a member 
bank under the provisions of this Act, every director 
who participated in or assented to the same shall be held 
liable in his personal or individual capacity for all dam- 
ages which said bank, its shareholclers, or any other 
person shall have sustained in consequence of such 
violation. 

Such dissolution shall not take awaj or impair any 
remedy against such corporation, its stockholders or 
officers, for any liability or penalty which shall have been 
].reviously incurred. 

PUBLIC SUBSCRIPTIONS— WHEN ACCEPTED. 

1913* ?lc' ^'^' 602g. Should the subscriptions by banks to the stock 
38 Stat. ' £.; of said Federal reserve banks or any one or more of them 
be, in the judgment of the organization committee, in- 
sufficient to provide the amount of capital required there- 
for, then and in that event the said organization com- 
mittee may, under conditions and regulations to be pre- 
scribed by it, offer to public subscription at par such 
an amount of stock in said Federal reserve banks, or any 
one or more of them, as said committee shall determine, 
subject to the same conditions as to payment and stock 
liability as provided for member banks. 

LIMIT TO STOCK HELD BY ANY INDIVIDUAL, COPART- 
NERSHIP, OR CORPORATION OTHER THAN A MEMBER 
BANK. PUBLIC STOCK, HOW TRANSFERABLE. 

Act Dec. 23, 602h. No individual, copartnership, or corporation 
38^%tat.'^' L.j other than a member bank of its district shall be per- 
2^2- mitted to subscribe for or to hold at any time more than 

$25,000 par value of stock in any Federal reserve bank. 
Such stock shall be known as public stock and may be 
transferred on the books of the Federal reserve bank by 
the chairman of the board of directors of such bank. 

ALLOTMENT OF STOCK TO UNITED STATES. 

Act Dec. 23 6021. Should the total subscriptions by banks and the 

lyirf, sec. 2; . , „ •i-r-<ii i i 

38 Stat. L.. public to the stock oi said r ederal reserve banks, or any 

^^^' one or more of them, be, in the judgment of the organiza- 

tion committee, insufficient to provide the amount of 
capital required therefor, then and in that event the said 
organization committee shall allot to the United States 
such an amount of said stock as said committee shall de- 



THE FEDERAI. RESERVE ACT. 123 

termine. Said United States stock shall be paid for at 
par out of any money in the Treasury not otherwise ap- 
propriated, and shall be held by the Secretary of the 
Treasury and disposed of for the benefit of the United 
States in such manner, at such times, and at such price, 
not less than par, as the Secretary of the Treasury shall 
determine. 



VOTING POWER. 



Dec. 23, 
sec. 2 : 



602 j. Stock not held by member banks shall not be en- j^^ct 
titled to voting power. 38_^ 'stat. l.. 

TRANSFER OF STOCK. 

602k. The Federal Reserve Board is hereby em- ^^Act Dec. 23, 
powered to adopt and promulgate rules and regulations 38 'stlt^ l.; 
governing the transfers of said stock. ^^^• 

MINIMUM CAPITAL OF FEDERAL RESERTE BANK. 

6021. No Federal reserve bank shall commence business jg^l* ^|^- |^: 
with a subscribed capital less than $1,000,000. 38^^ stat. • l.; 

RESERVE CITIES, STATUS OF. 

602m. The organization of reserve districts and Federal 19^3* ^1^: ¥• 
reserve cities shall not be construed as changing the ||g^ stat. u, 
present status of reserve cities and central reserve cities, 
except in so far as this Act changes the amount of 
reserves that may be carried with approved reserve 
agents located therein. 

AUTHORITY OF ORGANIZATION COMMITTEE TO EMPLOY 

ASSISTANTS. 

602n. The organization committee shall have power to ^g^ct Dec. 2|. 
appoint such assistants and incur such expenses in carry- ss 'stat.' l.) 
ing out the provisions of this Act as it shall deem neces- " • 
sary, and such expenses shall be payable by the Treasurer 
of the IJnited States upon voucher approved by the Secre- 
tary of the Treasury, and the sum of $100,000, or so 
much thereof as may be necessary, is hereby appropri- 
ated, out of any moneys in the Treasury not otherwise 
appropriated, for the payment of such expenses. 

BRANCH OFFICES. 

BRANCHES OF FEDERAL RESERVE BANKS. 

603. Sec. 3. — The Federal Reserve Board may permit or ^ Act Dec. 2^3. 
require any Federal reserve bank to establish branch 38 'stat!^' l.! 
banks within the Federal reserve district in which it is -^^-^j j,,^^ 21 
located or within the district of any Federal reserve bank i9i7,^^soc. 1 : 
which may have been suspended. Such branches, sub- 232. chap. 32." 



124 THE FEDERAL RESERVE AC3T. 

ject to such rules and regulations as the Federal Reserve 
Board may prescribe, shall be operated under the super- 
vision of a board of directors to consist of not more than 
seven nor less than three directors, of whom a majority 
of one shall be appointed by the Federal reserve bank of 
the district, and the remaininor directors by the Federal 
Reserve Board. Directors of branch banks shall hold 
oflBce during the pleasure of the Federal Reserve Board. 

FEDERAL RESER\TE BANKS. 

ORGANIZATION OF FEDERAL RESERVE BANKS. APPLI- 
CATION FOR STOCK BY NATIONAL BANKS. 

1913* ?ec' ^4' ^^^' ^^^' .^' — ^^^hen the organization committee shall 
38 'stat. ■ L.', have established Federal reserve districts as provided in 
^^'*- section two of this Act, a certificate shall be filed with the 

Comptroller of the Currency showing the geographical 
limits of such districts and the Federal reserve city 
designated in each of such districts. The Comptroller of 
the Currency shall thereupon cause to be forwarded to 
each national bank located in each district, and to such 
other banks declared to be eligible by the organization 
committee which may apply therefor, an application 
blank in form to be approved by the organization com- 
mittee, which blank shall contain a resolution to be 
adopted by the board of directors of each bank executing 
such application, authorizing a subscription to the capital 
stock of the Federal reserve bank organizing in that dis- 
trict in accordance with the provisions of this Act. 

ORGANIZATION CERTIFICATE. 

19U* ?ec; ^4- 60^^' When the minimum amount of capital stock pre- 
254 ^**'*- i^-'- scribed by this Act for the organization of any Federal 
reserve bank shall have been subscribed and allotted, the 
organization committee shall designate any five banks 
of those whose applications have been received, to 
execute a certificate of organization, and thereupon the 
banks so designated shall, under their seals, make an 
organization certificate which shall specifically state the 
name of such Federal reserve bank, the territorial extent 
of the district over which the operations of such Federal 
reserve bank are to be carried on, the city and State in 
which said bank is to be located, the amount of capital 
stock and the number of shares into wliich the same is 
divided, the name and place of doing business of each 
bank executing such certificate, and of all banks which 
have subscribed to tlie capital stock of such Federal re- 
serve bank and the number of shares subscribed by each, 
and the fact that the certificate is made to enable those 
banks executing same, and all banks which have sub- 
scribed or may thereafter subscribe lo the capital stock 
of such Federal reserve bank, to avail themselves of the 
advantages of this Act. 



THE FEDERAL RESERVE ACT. 125 

The said org^anization certificate shall be acknowl- 
edged before a judge of some court of record or notary 
public; and shall be, together with the acknowledgement 
thereof, authenticated by the seal of such court, or no- 
tary, transmitted to the Comptroller of the Currency, 
who shall file record and carefully preserve the same in 
his office. 

POWERS OF FEDERAL RESERYE BANKS. 

604b. Upon the filing of such certificate with the ,„Act dpc. 23 
Comptroller of the Currencj'^ as aforesaid, the said Fed- as 'stat.' u, 
eral reserve bank shall become a body corporate, and as ^^*' 
such, and in the name designated in such organization 
certificate, shall have power — 

First. To adopt and use a corporate seal. 

Second. To have succession for a period of twenty 
years from its organization unless it is sooner dissolved 
by an Act of Congress, or unless its franchise becomes 
forfeited by some violation of law. 

Third. To make contracts. 

Fourth. To sue and be sued, complain and defend, in 
any court of law or equity. 

Fifth. To appoint by its board of directors such offi- 
cers and employees as are not otherwise provided for in 
this act, to define their duties, require bonds of them and 
fix the penalty thereof, and to dismiss at pleasure such 
officers or emploj^ees. 

Sixth. To prescribe by its board of directors, by-laws, 
not inconsistent with law, regulating the manner in 
which its general business may be conducted, and the 
privileges granted to it by law may be exercised and 
enjoyed. 

Seventh. To exercise by its board of directors, or duly 
authorized officers or agents, all powers specifically 
granted by the provisions of this act and such incidental 
powers as shall be necessary to carry on the business of 
banking within the limitations prescribed by this act. 

Eighth,^ Upon deposit with the Treasurer of the 
United States of any bonds of the United States in the 
manner provided by existing law relating to national 
banks, to receive from the Comptroller of the Currency 
circulating notes in blank, registered and countersigned 
as provided by law, equal in amount to the par value of 
the bonds so deposited, such notes to be issued under the 
same conditions and provisions of law as relate to the 
issue of circulating notes of national banks secured by 
bonds of the United States bearing the circulating priv- 
ilege, except that the issue of such notes shall not be 
limited to the capital stock of such Federal reserve bank. 



* See section IS. Also section 5 of act approved Apr. 23. 1918, 
authorizing issuance of Federal Reserve Bank notes in any de- 
nominations (including .$1 and $2) against security of United 
States certificates of indebtedness. 



126 THE FEDEKAL, RESERVE ACTT. 

But no Federal reserve bank shall transact any business 
except such as is incidental and necessarily preliminary 
to its organization until it has been authorized by the 
Comptroller of the Currency to commence business under 
the provisions of this act. 

DIRECTORS OF FEDERAL RESERTE BANKS. 

lofs,* sec." ^i; 604c. Every Federal reserve bank shall be conducted 
255 ^*^*' ^ ' ^^^^r ^he supervision and control of a board of directors. 
The board of directors shall perform the duties usually 
appertaining to the office of directors of banking associa- 
tions and all such duties as are prescribed by law. 

Said board shall administer the affairs of said bank 
fairly and impartially and without discrimination in 
favor of or against any member bank or banks and shall, 
subject to the pro\asions of law and the orders of the 
Federal Reserve Board, extend to each member bank 
such discounts, advancements and accommodations as 
may be safely and reasonably made with due regard for 
the claims and demands of other member banks. 

CLASSIFICATION OF DIRECTORS. 

1913! ^ec.' ^4- 604d. Such board of directors shall be selected as here- 
255 '^*^** ^" i^^ft^i' specified and shall consist of nine members, hold- 
ing office for three years, and divided into three classes, 
designated as classes A, B, and C. 

Class A shall consist of three members, who shall be 
chosen by and be representative of the stock-holding 
banks. 

Class B shall consist of three members, who at the time 
of their election shall be actively engaged in their dis- 
trict in commerce, agriculture or some other industrial 
pursuit. 

Class C shall consist of three members who shall be 
designated by the Federal Reserve Board. When the 
necessary subscriptions to the capital stock have been 
obtained for the organization of any Federal reserve 
bank, the Fedei^^l Reserve Board shall appoint the class 
C directors and shall designate one of such directors as 
chairman of the board to be selected. Pending the desig- 
nation of such chairman, the organization committee 
shall exercise the powers and duties appertaining to the 
office of chairman in the organization of such Federal 
reserve bank. 

No Senator or Representative in Congress shall be a 
member of the Federal Reserve Board or an officer or a 
director of a Federal reserve bank. 

No director of class B shall be an officer, director, or 
employee of any bank. 

No director of class C shall be an officer, director, 
employee, or stockholder of any bank. 



THE FEDERAL RESERVE ACT. 127 

ELECTION OF CLASS A AND CLASS B DIRECTORS. 

604e. Directors of class A and class B shall be chosen j^^^* ^|^; ^^) 
in the following manner : 38^ stat. l., 

The Federal Reserve Board shall classify the member 
banks of the district into three general groups or divi- 
sions, designating each group by number. Each group 
shall consist as nearly as may be of banks of similar 
capitalization. Each member bank shall be permitted to ^ct Sept 26, 
nominate to the chairman of the board of directors of I9i8- 
the Federal reserve bank of the district one candidate for 
director of class A and one candidate for director of class 
B. The candidates so nominated shall be listed by the 
chairman, indicating by whom nominated, and a copy of 
said list shall, within fifteen days after its completion, be 
furnished by the chairman to each member bank. Each 
member bank by a resolution of the board or by an 
amendment to its by-laws shall authorize its president, 
cashier, or some other officer to cast the vote of the mem- 
ber bank in the elections of class A and class B directors. 

Within fifteen days after receipt of the list of candi- 
dates the duly authorized officer of a member bank shall 
certify to the chairman his first, second, and other choices 
for director of class A and class B, respectively, upon 
a preferential ballot upon a form furnished by the chair- 
man of the board of directors of the Federal reserve 
bank of the district. Each such officer shall make a 
cross opposite the name of the first, second, and other 
choices for a director of class A and for a director of 
class B, but shall not vote more than one choice for any 
one candidate. No officer or director of a member bank 
shall be eligible to serve as a class A director unless nomi- 
nated and elected by banks which are members of the 
same group as the member bank of which he is an officer 
or director. 

Any person who is an officer or director of more than 
one member bank shall not be eligible for nomination as 
a class A director except by banks in the same group as 
the bank having the largest aggregate resources of any 
of those of which such person is an officer or director. 

Any candidate having a majority of all votes cast in 
the column of first choice shall be declared elected. If 
no candidate have a majority of all the votes in the first 
column, then there shall be added together the votes 
cast by the electors for such candidates in the second col- 
umn and the votes cast for the several candidates in the 
first column. If any candidate then have a majority of 
the electors voting, by adding together the first and 
second choices, he shall be declared elected. If no can- 
didate have a majority of electors voting when the first 
and second choices shall have been added, then the votes 
cast in the third column for other choices shall be added 
together in like manner, and the candidate then having 



128 THE FEDERAL RESERVE ACT. 

the highest number of votes shall be declared elected. 
An immediate report of election shall be declared. 

APP0INT3IENT OF CLASS C DIRECTORS. FEDERAL RE 
SERVE AGENTS, DUTIES OF. 

19I3! ^tc. f ; 604f. Class C directors shall be appointed by the Fed- 
38 Stat. L.', eral Eeserve Board. They shall have been for at least 
two years residents of the district for which they are ap- 
pointed, one of whom shall be designated by said board 
as chairman of the board of directors of the Federal re- 
jg-^^*g^^"| 21. serve bank and as 'Federal reserve agent.' Ke shall be a 
person of tested banking experience, and in addition to 
his duties as chairman of the board of directors of the 
Federal reserve bank he shall be required to maintain, 
under regulations to be established by the. Federal Re- 
serve Board, a local office of said board on the premises 
of the Federal reserve bank. He shall make regular re- 
ports to the Federal Reserve Board and shall act as its 
official representative for the performance of the func- 
tions conferred upon it by this act. He shall receive an 
annual compensation to be fixed by the Federal Reserve 
Board and paid monthly by the Federal reserve bank to 
which he is designated. One of the directors of class C 
shall be appointed by the Federal Reserve Board as 
deputy chairman to exercise the powers of the chairman 
of the board when necessary. In case of the absence of 
the chairman and deputy chairman, the third-class C 
director shall preside at meetings of the board. 

Subject to the approval of the Federal Reserve Board, 
the Federal reserve agent shall appoint one or more, as- 
sistants. Such assistants, who shall be persons of tested 
banking experience, shall assist the Federal reserve agent 
in the performance of his duties and shall also have 
power to act in his name and stead during his absence or 
disability. The Federal Reserve Board shall require 
such bonds of the assistant Federal reserve agents as it 
may deem necessary for the protection of the United 
States. Assistants to the Federal reserve agent shall re- 
ceive an annual compensation, to be fixed and paid in 
the same manner as that of the Federal reserve agent. 

COMPENSATION OF DIRECTORS. 



257. 



191?} ^fic" ^4- ^^^S- Directors of Federal reserve banks shall receive, 
38 "'stat,' L.', in addition to any compensation otherwise provided, a 
reasonable allowance for necessary expenses in attend- 
ing meetings of their respective boards, Avhich amount 
shall be paid by the respective Federal reserve banks. 
Any compensation that may be provided by boards of 
directors of Federal reserve banks for directors, officers 
or employees shall be subject to the approval of the Fed- 
eral Reserve Board. 



THE FEDERAL RESERVE ACT. 129 

ORGANIZATION OF FEDERAL RESERTE BANKS. AU- 
THORITY OF ORGANIZATION COMMITTEE. 

604h. The Reserve Bank Organization Committee may, ^^^^ ^|^- 23. 
in organizing Federal reserve banks, call such meetings 38 fetat. ' l.| 
of bank directors in the several districts as may be neces- ^^" 
sary to carry out the purposes of this Act, and may 
exercise the functions herein conferred upon the chair- 
man of the board of directors of each Federal reserve 
bank pending the complete organization of such bank. 

FIRST MEETING OF DIRECTORS. DESIGNATION OF 
TERMS OF OFFICE. 

6041. At the first meeting of the full board of directors Act Dec. 23, 
of each Federal reserve bank, it shall be the duty of the ss stat^' l.) 
directors of classes A, B and C. respectively, to designate ^^^" 
one of the members of each class whose term of office 
shall expire in one jeixr from the first of January nearest 
the date of such meeting, one whose term of office shall 
expire at the end of two years from said date, and one 
whose term of office shall expire at the end of three years 
from said date. Thereafter every director of a Federal 
reserve bank chosen as hereinbefore provided shall hold 
office for a term of three years. Vacancies that may 
occur in the several classes of directors of Federal reserve 
banks may be filled in the manner provided for the origi- 
nal selection of such directors, such appointees to hold 
office for the unexpired terms of their predecessors. 

STOCK ISSUES ; INCREASE AND DECREASE OF CAPITAL. 

INCREASE ANT) DECREASE OF CAPITAL STOCK. 

605. Sec. 5.— The capital stock of each Federal reserve jg^^ ^|^- ^f: 
bank shall be divided into shares of $100 each. The out- 38^ stat" l.! 
standing capital stock shall be increased from time to 
time as member banks increase their capital stock and 
surplus or as additional banks become members, and may 
be decreased as member banks reduce their capital stock 
or surplus or cease to be members. 

STOCK NOT TRANSFERABLE. 

605a. Shares of the capital stock of Federal reserve ^^ Dec. 23. 
banks owned by member banks shall not be transferred .^s^^stat*' l.! 
or hypothecated. 257. 

INCREASE OF CAPITAL STOCK. 

605b. When a member bank increases its capital stock j^ct Dec. 23. 
or surplus, it shall thereupon subscribe for an additional ;^s stltf' H 
amount of capital stock of the Federal reserve bank of ^^'^- 
its district equal to six per centum of the said increase, 
one-half of said subscription to be paid in the manner 
hereinbefore provided for original subscription, and one- 
half subject to call of the Federal Reserve Board. 
ie43l2°— 20 9 



257. 



130 



THE FEDERAL, EESERVE ACT. 



Act Dec. 
1913, sec. 



38 
257. 



Stat. 



APPLICATIONS FOR CAPITAL STOCK. 

2^3, 605c. A bank applying for stoek in a Federal reserve 
L,; bank at any time after the organization thereof must sub- 
scribe for an amount of the capital stock of the Federal 
reserve bank equal to six per centum of the paid-up capi- 
tal stock and surplus of said applicant bank, paying 
therefor its par value plus one-half of one per centum 
a month from the period of the last dividend. 

CERTIFICATE OF INCREASE IN STOCK OF FEDERAL RE- 
SERVE BANK. 



Act Dec. 23, 
1913, sec. 5 



38 
257. 



Stat. 



Act Dec. 
1913. sec. 
38 
257. 



Stat. 



605d. When the capital stock of any Federal reserve 
£.', bank shall have been increased either on account of the 
increase of capital stock of member banks or on account 
of the increase in the number of member banks, the board 
of directors shall cause to be executed a certificate to the 
Comptroller of the Currency showing the increase in 
capital stock, the amount paid in, and by whom paid. 

REDUCTION OF CAPITAL STOCK. 

2^^: 605e. When a member bank reducas its capital stock it 
L.) shall surrender a proportionate amount of its holdings 
in the capital of said Federal reserve bank, and when a 
member bank voluntarily liquidates it shall surrender all 
of its holdings of the capital stock of said Federal reserve 
bank and be released from its stock subscription not pre- 
viously called. In either case the shares surrendered 
shall be canceled and the member bank shall receive in 
payment therefor, under regulations to be prescribed by 
the Federal Reserve Board, a sum equal to its cash-paid 
subscriptions on the shares surrendered and one-half of 
one per centum a month from the period of the last divi- 
dend, not to exceed the book value thereof, less any lia- 
bility of such member bank to the Federal reserve bank. 



INSOLTENCT OF MEMBER BANK. 



Act Dec. 23, 
1913, sec. ' 
38 Stat. 
258. 



g , 606. Sec. 6. — If any member bank shall be declared in- 
L.; solvent and a receiver appointed therefor, the stock held 
by it in said Federal reserve bank shall be canceled, with- 
out impairment of its liability, and all cash-paid sub- 
scriptions on said stock, with one-half of one per centum 
per month from the period of last dividend, not to ex- 
ceed the book value thereof, shall be first applied to all 
debts of the insolvent member bank to the Federal re- 
serve bank, and the balance, if any, shall be paid to the 
receiver of the insolvent bank. Whenever the capital 
stock of a Federal reserve bank is reduced, either on ac- 
count of a reduction in capital stock of any member bank 
or of the liquidation or insolvency of such bank, the 
board of directors shall cause to be executed a certificate 
to the Comptroller of the Currency showing such reduc- 
tion of capital stock and the amount repaid to such bank. 



THE FEDERAL RESERVE AOT. 131 

DITISION OF EARNINGS. 

607. Sec. 7. — After all necessary expenses of a Federal ^j^^ct Dec. 2^3. 
reserve bank have been paid or provided for, the stock- 38 'stat!^' l.', 
holders shall be entitled to receive an annual dividend of ^^^' 

six per centum on the paid-in capital stock, which divi- 
dend shall bo cumulative. 

After the aforesaid dividend claims have been fully ^qI^^^ ^"' ^' 
met, the net earnings shall be paid to the United States 
as a franchise tax except that the whole of such net 
earnings, including those for the year ending December 
thirty-first, nineteen hundred and eighteen, shall be paid 
into a surplus fund until it shall amount to one hundred 
per centum of the subscribed capital stock of such bank, 
and that thereafter ten per centum of such earnings shall 
be paid into the surj^lus. 

The net earnings derived by the United States from 
Federal reserve banks shall, in the discretion of the Secre- 
tary, be used to supplement the gold reserve held against 
outstanding United States notes, or shall be applied to 
the reduction of the outstanding bonded indebtedness of 
the United States under regulations to be prescribed by 
the Secretary of the Treasury. Should a Federal reserve 
bank be dissolved or go into liquidation, any surplus re- 
maining, after the payment of all debts, dividend require- 
n.ents as hereinbefore provided, and the par value of the 
stock, shall be paid to and become the property of the 
United States and shall be similarly applied. 

TAX EXEMPTIONS. 

607a. Federal reserve banks, including the capital stock j^^^t Dec. 2S, 
and surplus therein, and the income derived therefrom 38 'stat. ' l.', 
shall be exempt from Federal, State, and local taxation, ^^®* 
except taxes upon real estate. 

CONVERSION OF STATE BANKS INTO NATIONAL BANKS. 

608. Sec. 8.— Section fifty-one hundred and fifty-four, ^g^ct June ^3. 
United States Revised Statutes, is hereby amended to sec. ' 44; li 
read as follows : \ ^Tct ^Dec.^ls. 

Any bank incorporated by special law of any State or 3|^"^'gt^|^* £j 
of the United States or organized under the general laws 258. 
of any State or of the United States and having an unim- 
paired capital sufficient to entitle it to become a national 
banking association under the provisions of the existing 
laws may, ^ y the vote of the shareholders owning not less 
than fifty-one per centum of the capital stock of such 
bank or banking association, with the approval of the 
Comptroller of the Currency be converted into a national 
banking association, with any name approved by the 
Comptroller of the Currency: Provided, however, That 



132 THE FEDERAL RESERVE ACT. 

said conversion shall not be in contravention of the State 
law. In such case the articles of association and organi- 
zation certificate may be executed by a majority of the 
directors of the bank or banking institution, and the cer- 
tificate shall declare that the owners of fifty-one per 
centum of the capital stock have authorized the directors 
to make such certificate and to change or convert the 
bank or banking institution into a national association. 
A majority of the directors, after executing the articles of 
association and the organization certificate, shall have 
power to execute all other papers and to do whatever may 
be required to make its organization perfect and com- 
plete as a national association. The shares of any such 
bank may continue to be for the same amount each as they 
were before the conversion, and the directors may con- 
tinue to be the directors of the association until others are 
elected or appointed in accordance with the provisions of 
the statutes of the United States. AVhen the Comptroller 
has given to such bank or banking association a certificate 
that the provisions of this Act have been complied with, 
such bank or banking association, and all its stockholders, 
officers, and employees, shall have the same powers and 
privileges, and shall be subject to the same duties, lia- 
bilities, and regulations, in all respects, as shall have 
been prescribed by the Federal Reserve Act and by the 
national banking Act for associations originally organized 
as national banking associations. 

STATE RANKS AS MEMBERS. 

STATE BANKS MAY SUBSCRIBE. 

Act Dec. 23, 609. Sec. 9. — Any bank incorporated by special law of 
38^^'stat!^' L.i any State, or organized under the general laws of any 
^^Act June 21 State or of the United States, desiring to become a mem- 
1917, sec. 3 ; ber of the Federal Reserve System, may make application 
232, ^^^^ ^" to the Federal Reserve Board, under such rules and regu- 
lations as it may prescribe, for the right to subscribe to 
the stock of the Federal reserve bank organized within 
the district in which the applying bank is located. Such 
application shall be for the same amount of stock that 
the applying bank would be required to subscribe to as 
a national bank. The Federal Reserve Board, subject 
to such conditions as it may prescribe, may permit the 
applying bank to become a stockholder of such Federal 
reserve bank. 

APPLICATIONS FOR MEMBERSHIP. 

,^^^^ ^^^A ^^A 609a. In acting upon such applications the Federal 

1913, sec. 9; 38 „ -p, 1^11 -i -1 ^ /> • i tj." £ 

Stat. L., 259. Rcscrve Board sJiall consider the financial condition 01 
iftiT,' Beir^a?^' the applying bank, the general character of its manage- 
ment, and whether or not the corporate powers exercised 
are consistent with the purposes of this act. 



THE FEDERAL RESERVE ACT. 133 

"WHienever the Federal Reserve Board shall permit 
the applying bank to become a stockholder in the Fed- 
eral reserve bank of the district its stock subscription 
shall be payable on call of the .Federal Reserve Board, 
and stock issued to it shall be held subject to the pro- 
visions of this act. 

REGULATIONS AND EESTRICTIONS. 

609b. All banks admitted to membership under '^"thor- ^^Act^Dec^ 23^ 
ity of this section shall be required to comply, with the stat.' l., 259. 
reserve and capital requirements of this act and to con- 
form to those provisions of law imposed on national i^f^' g-^^^l -^• 
banks which prohibit such banks from lending on or 
purchasing their own stock, which relate to the with- 
drawal or impairment of their capital stock, and which 
relates to the payment of unearned dividends. 

MEMBER BANKS REQUIRED TO MAKE REPORTS TO FED- 
ERAL RESERVE BOARD AND SUBJECT TO EXAMINA- 
TION BY EXAMINERS APPOINTED BY THE BOARD AND 
SUCH BANKS' OFFICERS, AGENTS. AND EMPLOYEES 
SUBJECT TO PENALTIES OF SECTION 5209. 

609c. Such banks and the officers, agents, and employees ^^^^t Dec. 2^3, 
thereof shall also be subject to the provisions of and toss 'stat.' l.', 
the penalties prescribed by section fifty-two hundred and -'^^• 
nine of the Revised Statutes, and shall be required to ^^^ ^^^^ ^^ 
make reports of condition and of the payment of divi- 1917, sec. 3." 
dends to the Federal reserve bank of which they become 
a member. Not less than three of such reports shall be 
made annually on call of the Federal reserve bank on 
dates to be fixed by the Federal Reserve Board. Failure 
to make such reports within ten days after the date they 
are called for shall subject the offending bank to a penalty 
of $100 a day for each day that it fails to transmit such 
report; such penalty to be collected by the Federal re- 
serve bank by suit or otherwise. 

As a condition of membership such banks shall like- 
wise be subject to examinations made by direction of the 
Federal Reserve Board or of the Federal reserve bank by 
examiners selected or approved by the Federal Reserve 
Board. 

Whenever the directors of the Federal reserve bank 
shall approve the examinations made by the State 
authorities, such examinations and the reports thereof 
may be accepted in lieu of examinations made by exam- 
iners selected or approved by the Federal Reserve Board : 
Provided^ however^ That when it deems it necessary the 
board may order special examinations by examiners of its 
own selection and shall in all cases approve the form of the 
report. The expenses of all examinations, other than 
those made by State authorities, shall be assessed against 
and paid by the banks examined. 



134 THE FEDERAL RESERVE ACT. 

FAILURE TO COMPLY WITH REGULATIONS— PENALTY. 

Act Dec. 23, 609d. If at any time it shall appear to the Federal Re- 
38^^'stlt' L.; serve Board that a member bank has failed to comply 
260. ' -with the provisions of this section or the regulations of 

\ct June 21 ^hc Federal Eeserve Board made pursuant thereto, it 
1917, sec. 3." ' shall be within the power of the board after hearing to 
require such bank to surrender its stock in the Federal 
reserve bank and to forfeit all rights and privileges of 
membership. The Federal Reserve Board may restore 
membership upon due proof of compliance with the con- 
ditions unposed by this section. 

WITHDRAWAL FROM MEMBERSHIP IN FEDERAL RE- 
SERYE BANK BY STATE BANK OR TRUST COMPANY. 

Act JuDe^2i, 609e. Any State bank or trust company desiring to 
'' ^^^' ■ withdraw from membership in a Federal reserve, bank 
may do so, after six months' written notice shall have 
been filed with the Federal Reserve Board, upon the sur- 
render and cancellation of all of its holdings of capital 
stock in the Federal reserve bank: Provided^ however^ 
That no Federal reserve bank shall, except under express 
authority of the Federal Reserve Board, cancel within the 
same calendar year more than twenty-five per centum of 
its capital stock for the purpose of effecting voluntary 
withdrawals during that year. All such applications 
shall be dealt with in the order in which they are filed 
with the board. Whenever a member bank shall surrender 
its stock holdings in a Federal reserve bank, or shall be 
ordered to do so by the Federal Reserve Board, under 
authority of law, all of its rights and privileges as a 
member bank shall thereupon cease and determine, and 
after due provision has been made for any indebtedness 
due or to become due to the Federal reserve bank it shall 
be entitled to a refund of its cash paid subscription with 
interest at the rate of one-half of one per centum per 
month from date of last dividend, if earned, the amount 
refunded in no event to exceed the book value of the stock 
at that time, and shall likewise be entitled to repayment 
of deposits and of any other balance due from the Fed- 
eral reserve bank. 

AMOUNT OF CAPITAL REQUIRED TO ENABLE STATE 
BANK TO BECOME MEMBER BANK. 

Act Dec. 23, 609f. No applying bank shall be admitted to member- 
38^^'stlt!^' L.; ship in a Federal reserve bank unless it possesses a paid- 
^^Act June 21 "P? Unimpaired capital sufficient to entitle it to become a 
1917, sec. 3. ' national banking association in the place where it is situ- 
ated under the provisions of the national-bank act. 



THE FEDERAL RESERVE ACT. 135 

RIGHTS, POWERS, AND LIABILITIES OF STATE BANKS 
WHICH BECOME MEMBER BANKS. 

609g. Banks becoming members of the Federal Reserve 1917* sic"!.^^ 
System mider authority of this section shall be subject 
to the provisions of this section and to those of this 
act which relate specifically to member banks, but shall 
not be subject to examination under the provisions of the 
first two paragraphs of section fifty-two hundred and 
forty of the Revised Statutes as amended by section 
twenty-one of this act.^ Subject to the provisions of this 
act and to the regulations of the board made pursuant 
thereto, any bank becoming a member of the Federal 
Reserve System shall retain its full charter and statutory 
rights as a State bank or trust company, and may con- 
tinue to exercise all corporate powers granted it by the 
State in which it was created, and shall be entitled to all 
privileges of member banks: Provided., hoioever., That no 
Federal reserve bank shall be permitted to discount for 
any State bank or trust company notes, drafts, or bills of 
exchange of any one borrower who is liable for borrowed 
money to such State bank or trust company in an amount 
greater than ten per centum of the capital and surplus of 
such State bank or trust company, but the discount of 
bills of exchange drawn against actually existing value 
and the discount of commercial or business paper actually 
owned by the person negotiating the same shall not be 
considered as borrowed money within the meaning of this 
section. The Federal reserve bank, as a condition of the 
discount of notes, drafts, and bills of exchange for such 
State bank or trust company, shall require a certificate or 
guaranty to the effect that the borrower is not liable to 
such bank in excess of the amount provided by this sec- 
tion, and will not be permitted to become liable in excess 
of this amount while such notes, drafts, or bills of ex- 
change are under discount with the Federal reserve bank. 

It shall be unlawful for any officer, clerk, or agent of 
any bank admitted to membership under authority of this 
section to certify any check drawn upon such bank unless 
the person or company drawing the check has on deposit 
therewith at the time such check is certified an amount of 
money equal to the amount specified in such check. Any 
check so certified by duly authorized officers shall be a 
good and valid obligation against such bank, but the act 
of any such officer, clerk, or agent in violation of this 
section may subject such bank to a forfeiture of its mem- 
bership in the Federal Reserve System upon hearing by 
the Federal Reserve Board. 

* AmeudiutJ sectiou 21 of this act. 



136 the federal reserve act. 

Federal Eesek\'e Board. 

APPOINTMENT, COMPENSATION, AND QUALIFICATION 
OF MEMBERS OF FEDERAL RESERTE BOARD. 

Act Dec. 23, g^Q. Sec. 10. — A Federal Reserve Board is hereby cre- 
ss sutl' L.iated which shall consist of seven members, including 
^®*^- the Secretary of the Treasury and the Comptroller of the 

Currency, who shall be members ex officio, and live mem- 
bers appointed by the President of the United States, by 
and with the advice and consent of the Senate. In 
selecting the five appointive members of the Federal Re- 
serve Board, not more than one of whom shall be selected 
from any one Federal reserve district, the President shall 
have due regard to a fair representation of the dilierent 
commercial, industrial and geographical divisions of the 
country. The five members of the Federal Reserve 
Board appointed by the President and confirmed as afore- 
said shall devote their entire time to the business of the 
Federal Reserve Board and shall each receive an annual 
salary of $12,000, payable monthly together with actual 
necessary traveling expenses, and the Comptroller of the 
Currency, as ex officio member of the Federal Reserve 
Board, shall, in addition to the salary now paid him as 
Comptroller of the Currency, receive the sum of §7,000 
annually for his services as a member of said board. 
Act Mar. 3. The Secretary of the Treasury and the Comptroller of 
^®^^- the Currency shall be ineligible during the time they are 

in office and for two years thereafter to hold any office, 
position, or employment in any member bank. The ap- 
pointive members of the Federal R-eserve Board shall be 
ineligible during the time they are in office and for two 
years thereafter to hold any office, position, or employ- 
ment in any member bank, except that this restriction 
shall not apply to a member who has served the full term 
for which he was appointed. Of the five members thus 
appointed by the President at least two shall be persons 
experienced in banking or finance. One shall be desig- 
nated by the President to serve for two, one for four, one 
for six, one for eight, and one for ten years, and there- 
after each member so appointed shall serve for a term 
of ten years unless sooner removed for cause by the Presi- 
dent. 

GOVERNOR AND YICE GOVERNOR; OFFICERS; QUALIFI- 
CATION OF MEMBERS. 

loia* ?e^*^* ilf- ^^^^' ^^ ^^^ ^^'^ persons thus appointed, one shall be 

38 Stat* L.', designated by the President as governor and one as vice 

260. governor of the Federal Reserve Board. The governor 

of the Federal Reserve Board, subject to its supervision, 

shall be the active executive officer. The Secretary of 

' See section 5209, Revised Statutes, as aiueiuled by act of Sept. 
26, 191S (p. 88 ante), for penalty for false certitication of checks 
by officers of Federal reserve banks and national banks. 



THE FEDERAL RESERVE ACT. 137 

the Treasury may assign offices in the Department of the 
Treasury for the use of the Federal Reserve Board. Each 
member'^of the Federal Reserve Board shall within fifteen 
days after notice of appointment make and subscribe to 
the oath of office. 

PROYISION FOR EXPENSES. 

610b. The Federal Reserve Board shall have power to Act Dec 23. 
levy semiannually upon the Federal reserve banks, in pro- sl^^'sut;" ^l.'. 
portion to their capital stock and surplus, an assessment 26i. 
sufficient to pay its estimated expenses and the salaries 
of its members and employees for the half year succeed- 
ing the levying of such assessment, together with any 
deficit carried forward from the preceding half year. 

FIRST MEETING OF BOARD. SECRETARY OF TREASURY 
CHAIRMAN OF BOARD. 

610c. The fii'st meeting of the Federal Reserve Board Act Dec. 23, 
shall be held in Washington, District of Columbia, as soon sl^^'sut.' ^l.*, 
as may be after the passage of this act, at a date to be^ei. 
fixed by the Reserve Bank Organization Committee. The 
Secretary of the Treasury shall be ex officio chairman 
of the Federal Reserve Board. 

MEMBER OF FEDERAL RESERYE BOARD NOT TO BE 
OFFICER, DIRECTOR. OR STOCKHOLDER IN ANY BANK- 
ING INSTITUTION OR TRUST COMPANY. 

610d. No member of the Federal Reserve Board shall Act Dec. 23, 
be an officer or director of any bank, banking institution. 38 'stlt!' u, 
trust company, or Federal reserve bank nor hold stock 26I. 
in any bank, banking institution, or trust company ; and 
before entering upon his duties as a member of the Fed- 
eral Reserve Board he shall certify under oath to the 
Secretary of the Treasury that he has complied with this 
requirement. 

TACANCIES ON BOARD— HOW FILLED. 

610e. Whenever a vacancy shall occur, other than by Act Dec. 23, 
expiration of term, among the five members of the Federal ss 'stat." l.', 
Reserve Board appointed by the President, as above pro- 26i- 
vided, a successor shall be appointed by the President, 
with the advice and consent of the Senate, to fill such 
vacancy, and when appointed he shall hold office for the 
unexpired term of the member whose place he is selected 
to fill. 

The President shall have power to fill all vacancies 
that may happen on the Federal Reserve Board during 
the recess of the Senate, by granting commissions which 
shall expire thirty days after the next session of the 
Senate convenes. 

POWERS OF SECRETARY OF TREASURY. 

610f. Nothing in this Act contained shall be construed ^^^?^^ f^ff- {^: 
as taking away any powers heretofore vested by law in 38 stat. l.. 
the Secretary of the Treasury which relate to the super- " 



138 THE FEDERAL RESERVE ACT. 

vision, management, and control of the Treasury Depart- 
ment and bureaus under such department, and wherever 
any power vested by this Act in the Federal Reserve 
Board or the Federal reserve agent appears to conflict 
with the powers of the Secretary of the Treasury, such 
powers shall be exercised subject to the supervision and 
control of the Secretary. 

FEDERAL RESERVE BOARD TO MAKE ANNUAL REPORT 
TO SPEAKER OF THE HOUSE OF REPRESENTATIVES. 

1913! fee.' K?i 610g. The Federal Reserve Board shall annually make 
38^ Stat. L., fi full report of its operations to the Speaker of the House 
of Representatives, who shall cause the same to be 
printed for the information of the Congress. 

COMPTROLLER OF THE CURRENCY. 

19*13! ?ec^' H?;' ^^^^' Section three hundred and twenty-four of the 
38^ Stat. L.; Revised Statutes of the United States shall be amended 
so as to read as follows: There shall be in the Depart- 
ment of the Treasury a bureau charged with the execu- 
tion of all laws passed by Congress relating to the issue 
and regulation of national currency secured by United 
States bonds and, under the general supervision of the 
Federal Reserve Board, of all Federal reserve notes, the 
chief officer of which bureau shall be called the Comp- 
troller of the Currency and shall perform his duties under 
the general directions of the Secretary of the Treasury. 

POWERS OF FEDERAL RESERVE BOARD. 

1913, sec." 11; 611. Scc. 11. — The Federal Reserve Board shall be au- 
261. ^*^*' ^"thorized and empowered: 

EXAMINATION OF BOOKS OF FEDERAL RESERVE BANKS 
AND MEMBER BANKS BY FEDERAL RESERVE BOARD. 
BOARD MAY REQUIRE REPORTS. 

1913! sec^" n^; 611a. (a) To examine at its discretion the accounts, 
38 Stat.' L.; books and affairs of each Federal reserve bank and of 
each member bank and to require such statements and 
reports as it may deem necessary. The said board shall 
publish once each week a statement showing the condi- 
tion of each Federal reserve bank and a consolidated 
statement for all Federal reserve banks. Such state- 
ments shall show in detail the assets and liabilities of the 
Federal reserve banks, single and combined, and shall 
furnish full information regarding the character of the 
money held as reserve and the amount, nature and 
maturities of the paper and otlier investments owned or 
held by Federal reserve banks. 



THE FEDERAL RESERVE ACT. 139 

REDISCOUNTS. 

611b. (b) To permit, or, on the affirmative vote of at ^^f ^^^- 23. 
least five members of the Reserve Board to re<iuire:« 'stat.' l.'. 
Federal reserve banks to rediscount the discounted paper 
of other Federal reserve banks at rates of interest to be 
fixed by the Federal Reserve Board. 

SUSPENSION OF RESERYE REQUIREMENTS. 

611c. (c) To suspend for a period not exceeding thirty jg^^* f^^- ^^: 
da vs. and from time to time to renew such suspension for ss 'stat' l.', 
periods not exceeding fifteen days, any reserve require- 
ment specified in this act : Provided^ That it shall estab- 
lish a graduated tax upon the amounts by which the 
reserve requirements of this Act may be permitted to fall 
below the level hereinafter specified: And provided fur- 
ther, That when the gold reserve held against Federal 
reserve notes falls below forty per centum, the Federal 
Reserve Board shall establish a« graduated tax of not 
more than one per centum per annum upon such defi- 
ciency until the reserves fall to thirty-two and one-half 
per centum, and when said reserve falls below thirty-two 
and one-half per centum, a tax at the rate increasingly of 
not less than one and one-half per centum per annum 
upon each two and one-half per ct-ntum or fraction 
thereof that such reserve falls below thirty-two and one- 
half per centum. The tax shall be paid by the reserve 
bank, but the reserve bank shall add an amount equal to 
said tax to the rates of interest and discount fixed by the 
Federal Reserve Board. 

ISSUE AND RETIREMENT OF FEDERAL RESERYE NOTES. 

611(i. {d) To supervise and regulate through the bureau ^ct Dec. 23, 
under the charge of the Comptroller of the Currency the ss 'stat.' l.', 
issue and retirement of Federal reserve notes, and to pre- -'^^* 
scribe rules and regulations under which such notes may 
be delivered by the Comptroller to the Federal reserve 
agents applying therefor. 

RESERYE CITIES. 

611e. ie) To add to the number of cities cLissified as ,„4S* ^^'^- ??' 

1 1 1 "> SOC 1 1 * 

reserve and central reserve cities under existing law in 3S stat.' l.', 
which national banking associations are subject to the "^^' 
reserve requirements set forth in section twenty of this 
act; or to reclassify existing reserve and central reserve 
cities or to terminate their designation as such. 

SUSPENSION OR REMOYAL OF OFFICER OR DIRECTOR 
OF A FEDERAL RESERYE BANK. 

611f. (/) To suspend or remove any officer or director Act Dec. 23. 
of any Federal reserve bank, the cause of sucli removal sl^^'st^at!' Y.! 
to be forthwith communicated in writing by the Federal-*'-* 
Reserve Board to the removed officer or director and to 
said bank. 



140 THE FEDERAL RESERVE ACT. 

WKITING OFF DOUBTFUL OR WORTHLESS ASSETS. 

19^3* fee' ii\ ^^^^' {9) To require the writing off of doubtful or 
38 Stat.' L,', worthless assets upon the books and balance sheets of 
^ ■ Federal reserve banks. 

SUSPENSION OF OPERATIONS OF FEDERAL RESERVE 
BANK. 

1913! fee: ih 61 111. {h) To suspend, for the violation of any of the 
38 'stat.' L.) provisions of this Act, the operations of any Federal re- 
serve bank, to take possession thereof, administer the 
same during the period of suspension, and, when deemed 
advisable, to liquidate or reorganize such bank. 

REQUIREMENT OF BONDS FROM FEDERAL RESERVE 
AGENTS AND AUTHORITY TO MAKE NECESSARY REGU- 
LATIONS UNDER THIS ACT. 

19^3* sec*^" '\\' 6^^^- (*) To require 'bonds of Federal reserve agents, 
38^ Stat.' L.l to make regulations for the safeguarding of all collateral, 
^"* bonds. Federal reserve notes, money or property of any 

kind deposited in the hands of such agents, and said 
board shall perform the duties, functions, or services 
specified in this Act, and make all rules and regulations 
necessary to enable said board effectively to perform the 
same. 

GENERAL SUPERVISION. 

19*13* sec^' n^i 611J- (i) To exercise general supervision over said 
38 'stat.' L.; Federal reserve banks. 

262. 

PERMIT TO NATIONAL BANKS TO ACT AS TRUSTEE, EX- 
ECUTOR, ADMINISTRATOR, OR REGISTRAR OF STOCKS 
AND BONDS. 

1913* fee' i\' 6^^^- (^) To grant by special permit to national banks 
38 'stat.' L.' applying therefor, w^ien not in contravention of State or 
^^I'ct Sept. 26, lofal law, the right to act as trustee, executor, adminis- 
1918. ' trator, registrar of stocks and bonds, guardian of estates, 

assignee, receiver, committee of estates of lunatics, or in 
any other fiduciary capacity in which State banks, trust 
companies, or other corporations which come into com- 
petition with national banks are permitted to act under 
the laws of the State in which the national bank is 
located. 

Whenever the laws of such State authorize or permit 
the exercise of any or all of the foregoing powers by 
State banks, trust companies, or other corporations which 
compete with national banks, the granting to and the 
exercise of such powers by national banks shall not be 
deemed to ba in contravention of State or local law 
within the meaning of this Act. 

National banks exercising any or all of the powers 
enumerated in this subsection shall segregate all assets 



THE FEDERAL. RESERVE ACT. 141 

held in any fiduciary capacity from the general assets of 
the bank and shall keep a separate set of books and rec- 
ords showing in proper detail all transactions engaged 
in under authority of this subsection. Such books and 
records shall be open to inspection by the State authori- 
ties to the same extent as the books and records of cor- 
porations organized under State law which exercise fidu- 
ciary powers, but nothing in this Act shall be construed 
as authorizing the State authorities to examine the books, 
records, and assets of the national bank which are not 
held in trust under authority of this subsection. 

No national bank shall receive in its trust department 
deposits of current funds subject to check or the deposit 
of checks, drafts, bills of exchange, or other items for 
collection or exchange purposes. Funds deposited or 
held in trust by the bank awaiting investment shall be 
carried in a separate account and shall not be used by the 
bank in the conduct of its business unless it shall first set 
aside in the trust department United States bonds or 
other securities approved by the Federal Reserve Board. 

In the event of the failure of such bank the owners of 
the funds held in trust for investment shaH have a lien 
on the bonds or other securities so set apart in addition 
to their claim against the estate of the bank. 

"Whenever the laws of a State require corporations act- 
ing in a fiduciary capacity, to deposit securities with the 
State authorities for the protection of private or court 
trusts, national banks so acting shall be required to make 
similar deposits and securities so deposited shall be held 
for the protection of private or court trusts, as provided 
by the State law. 

National banks in such cases shall not be required to 
execute the bond usually required of individuals if State 
corporations under similar circumstances are exempt 
from this requirement. 

National banks shall have power to execute such bond 
when so required by the laws of the State. 

In any case in which the laws of a State require that a 
corporation acting as trustee, executor, administrator, or 
in any capacity specified in this section, shall take an 
oath or make an affidavit, the president, vice president, 
cashier, or trust officer of such national bank may take 
the necessary oath or execute the necessary affidavit. 

It shall be unlawful for any national banking associa- 
tion to lend any officer, director, or employee any funds 
held in trust under the powers conferred by this section. 
Any officer, director, or employee making such loan, or to 
whom such loan is made, may be fined not more than 
$5,000, or imprisoned not more than five j^ears. or may 
be both fined and imprisoned, in the discretion of the 
court. 

In passing upon applications for permission to exercise 
the powers enumerated in this subsection, the Federal 



142 THE FEDERAL RESERVE ACT. 

Reserve Board may take into consideration the amount 
of capital and surplus of the applying bank, whether or 
not such capital and surplus is sufficient under the cir- 
cumstances of the case, the needs of the community to be 
served, and any other facts and circumstances that seem 
to it proper, and may grant or refuse the application 
accordingly : Provided^ That no permit shall be issued to 
any national banking association having a capital and 
surplus less than the capital and surplus required by 
State law of State banks, trust companies, and corpora- 
tions exercising such powers. 

EMPLOYMENT OF ATTORNEYS, CLERKS, ETC., AND PRO- 
VISION FOR PAYMENT OF SALARIES. 

Act Dec. 23, 611-1. (Z) To employ such attorneys, experts, assistants, 
38 'sut L.i clerks, or other employees as may be deemed necessary to 
2^2. conduct the business of the board. All salaries and fees 

shall be fixed in advance by said board and shall be paid 
in the same manner as the salaries of the members of said 
board. All such attorneys, experts, assistants, clerks, 
and other employees shall be appointed without regard to 
the provision^ of the act of January sixteenth, eighteen 
hundred and eighty-three (volume twenty -two. United 
States Statutes at Large, page four hundred and three), 
and amendments thereto, or any rule or regulation made 
in pursuance thereof: Provided^ That nothing herein 
shall prevent the President from placing said employees 
in the classified service. 

DISCOUNT BY FEDERAL RESERVE BANK OF PAPER SE- 
CURED BY UNITED STATES BONDS ISSUED SINCE 
APRIL 24, 1917. 

i9iV* ^^^^' ^' Slim, (m) Upon the affirmative vote of not less than 
five of its members, the Federal Reserve Board shall have 
power to permit Federal reserve banks to discount for any 
member bank notes, drafts, or bills, of exchange bearing 
the signature or endorsement of any one borrower in excess 
of the amount permitted by section nine and section thir- 
teen of this act, but in no case to exceed twenty per 
centum of the member bank's capital and surplus : Pro- 
vided^ however, That all such notes, drafts, or bills of 
exchange discounted for any member bank in excess of 
the amount permitted under such sections shall be se- 
cured by not less than a like face amount of bonds or 
notes of the United States issued since April twenty- 
fourth, nineteen hundred and seventeen, or certificates of 
indebtedness of the United States: Provided further, 
That the provisions of this subsection {m) shall not be 
operative after December thirty-first, nineteen hundred 
and twenty. 



THE FEDERAL RESERVE ACT. 143 

FEDERAL ADTISORT COUNCIL. 

612. Sec. 12.— There is hereby created a Federal Ad- jg^^* P/^^- ^^: 
visory Council, which shall consist of as many members 38 sut." l.) 
as there are Federal reserve districts. Each Federal re- " * 

serve bank by its board of directors shall annually select 
from its own Federal reserve district one member of said 
council, who shall receive such compensation and allow- 
ances as may be fixed by his board of directors subject to 
the approval of the Federal Eeserve Board. The meet- 
ings of said advisory council shall be held at Washing- 
ton, District of Columbia, at least four times each year, 
and oftener if called by the Federal Reserve Board. The 
council may in addition to the meetings above provided 
for hold such other meetings in Washington, District of 
Columbia, or elsewhere, as it may deem necessary, may 
select its own officers and adopt its own methods of pro- 
cedure, and a majority of its members shall constitute a 
quorum for the transaction of business. Vacancies in the 
council shall be filled by the respective reserve banks, and 
members selected to fill vacancies, shall serve for the un- 
expired term. 

POWERS OF FEDERAL ADVISORY COUNCIL. 

612a. The Federal Advisory Council shall have power, ^^Act Dec 23, 
by itself or through its officers, (1) to confer directly with ss stat. L', 
the Federal Eeserve Board on general business condi- ~^^' 
tions; (2) to make oral or written representations con- 
cerning matters within the jurisdiction of said board; 
(3) to call for information and to make recommendations 
in regard to discount rates, rediscount business, note is- 
sues, reserve conditions in the various districts, the pur- 
chase and sale of gold or securities by reserve banks, 
open-market operations by said banks, and the general 
affairs of the reserve banking system. 

POWERS OF FEDERAL RESERTE BANKS. 

613. Sec. 13. — Any Federal reserve bank may receive jg^ct Dec 23, 
from any of its member banks, and from the United ss stat." l.', 
States.^ deposits of current funds in lawful money, '^Act sept. 7. 
national-bank notes, Federal reserve notes, or checks, L^^fgg^^ ^**^* 
and drafts, payable upon presentation, and also, for Act June 21, 
collection, maturing notes and bills; or, solely for pur- ^^^'' ^^*^- *• 
poses of exchange or of collection, may receive from 

other Federal reserve banks deposits of current funds in 
lawful money, national-bank notes, or checks upon 
other Federal reserve banks, and checks and draft.s. pay- 
able upon presentation within its district, and maturing 
notes and bills payable within its district; or, solely for 

* Under authority of war finance act, approved Apr. 5, 1918, 
as amended by act of Mar. 3, 1919, may receive deposits from War 
Finance Corporation. 



144 THE FEDERAL RESERVE ACT. 

the purposes of exchange or of collection, may receive 
from any nomnember bank or trust company deposits 
of current funds in lawful money, national-bank notes, 
Federal reserve notes, checks and drafts payable upon 
presentation, or maturing notes and bills: Provided^ 
Such nonmember bank or trust company maintains with 
the Federal reserve bank of its district a balance sufficient 
to offset the items in transit held for its account by the 
Federal reserve bank: Provided^ further^ That nothing 
in this or any other section of this act shall be construed 
as prohibiting a member or nonmember bank from mak- 
ing reasonable charges, to be determined and regulated 
by the Federal Reserve Board, but in no case to exceed 
10 cents per $100 or fraction thereof, based on the total 
of checks and drafts presented at any one time, for col- 
lection or payment of checks and drafts and remission 
therefor by exchange or otherwise; but no such charges 
shall be made against the Federal reserve banks. 

REDISCOUNTS — NOTES, DRAFTS, AND BILLS OF EX- 
CHANGE. 

1913* ^c^* 1^3^: 613a. Upon the indorsement of any of its member 
263 ^^^^ ^■' '^^"ks? which shall be deemed a waiver of demand, notice 
Act Sept. 7, and protest by such bank as to its own indorsement ex- 
U,^7^2f^ ^*^*' clusively, any Federal reserve bank may discount notes, 
drafts, and bills of exchange arising out of actual com- 
mercial transactions; that is, notes, drafts, and bills of 
exchange issued or drawn for agricultural, industrial, or 
commercial purposes, or the proceeds of which have been 
used, or are to be used, for such purposes, the Federal 
Reserve Board to have the right to determine or define 
the character of the paper thus eligible for discount, 
within the meaning of this Act. Nothing in this Act 
contained shall be construed to prohibit such notes, 
drafts, and bills of exchange, secured by staple agricul- 
tural products, or other goods, wares, or merchandise 
from bein^ eligible for such discount ; but such definition 
shall not include notes, drafts, or bills covering merely 
investments or issued or drawn for the purpose of carry- 
ing or trading in stocks, bonds, or other investment 
securities, except bonds and notes of the Government of 
the United States.^ Notes, drafts, and bills admitted to 
discount under the terms of this paragraph must have a 
maturity at the time of discount of not more than ninety 
days, exclusive of days of grace: Provided^ That notes, 
drafts, and bills drawn or issued for agricultural pur- 
poses or based on live stock and having a maturity not 
exceeding six months, exclusive of days of grace, may be 
discounted in an amount to be limited to a percentage 
of the assets of the Federal reserve bank, to be ascer- 
tained and fixed by the Federal Reserve Board. 

' Or bonds of the War Finance Corporation. See act approved 
Apr. 5, 1918. 



THE FEDERAL, RESERVE ACT. 145 

The aggregate of siich notes, drafts, and bills bearing 
the signature or indorsement of any one borrower, whether 
a person, company, firm, or corporation, rediscounted for 
any one bank shall at no time exceed ten per centum of 
the unimpaired capital and surplus of said bank ; but this 
restriction shall not apply to the discount of bills of ex- 
change drawn in good faith against actually existing 
values. 

ACCEPTANCES AND LIMITATIONS THEREOF. 

613b. Any Federal reserve bank may discount accept- Act Dec. 23, 
ances of the kinds hereinafter described, which have ail^^'stat "^l.! 
maturity at the time of discount of not more than three '^^t Mar 3 
months' sight, exclusive of days of grace, and which areisioj 38 stat! 
indorsed by at least one member bank. act Sept. 7, 

Any member bank may accept drafts or bills of ex- ^^^7^2^^ ^*^*' 
change drawn upon it having not more than six months Act .iune 21, 
sight to run. exclusive of days of gi'ace, which grow out ^ ^ ' ^^^' ^' 
of transactions involving the importation or exporta- 
tion of goods ; or which gi*ow out of transactions involv- 
ing the domestic shipment of goods provided shipping 
documents conveying or securing title are attached at 
the time of acceptance; or which are secured at the time 
of acceptance by a warehouse receipt or other such 
document conveying or securing title covering readily 
marketable staples. Xo member bank shall accept, 
whether in a foreign or domestic transaction, for any 
one person, company, firm, or corporation to an amount 
equal at any time in the aggregate to more than ten per 
centiun of its paid-up and unimpaired capital stock and 
surplus, unless the bank is secured either by attached 
documents or by some other actual security growing out 
of the same transaction as the acceptance; and no bank 
shall accept such bills to an amount equal at any time 
in the aggregate to more than one-half of its paid-up 
and unimpaired capital stock and surplus: Provided, 
however. That the Federal Reserve Board, under such 
general regulations as it may prescribe, which shall 
apply to all banks alike regardless of the amount of 
capital stock and surplus, may authorize any member 
bank to accept such bills to an amount not exceeding at 
any time in the aggregate one hundred per centum of 
its paid-up and unimpaired capital stock and surplus: 
Provided further. That the aggregate of acceptances 
gi-owing out of domestic transactions shall in no event 
exceed fifty per centum of such capital stock and surplus. 

Any Federal reserve bank may make advances to its 
member banks on their promissory notes foi; a period not 
exceeding fifteen days at rates to be established by such 
Federal reserve banks, subject to the review and determi- 
nation of the Federal Reserve Board, provided such 
promissory notes are secured by such notes, drafts, bills 
of exchange, or bankers' acceptances as are eligible for 
4&4312°— 20 10 



146 THE FEDERAL RESERYE ACT. 

rediscount or for purchase by Federal reserve banks 
under the provisions of this Act, or by the deposit or 
pledge of bonds or notes of the United States.^ 

EXCEPTIONS AS TO LIMIT OF INDEBTEDNESS. POWER 
TO ACT AS INSURANCE AGENT, AS REAL ESTATE LOAN 
BROKER, AND TO ACCEPT DRAFTS, ETC. 

Act Dec. 23, 613c. Section fifty-two hundred and two of the Revised 
38 'stiu L.l Statutes of the United States is hereby amended so as to 
264. read as follows: No national banking association shall at 

any time be indebted, or in any way liable, to an amount 
exceeding the amount of its capital stock at such time 
actually paid in and remaining undiminished by losses or 
otherwise, except on account of demands of the nature 
following : 

First. Notes of circulation. 

Second. Moneys deposited with or collected by the 
association. 

Third. Bills of exchange or drafts drawn against 
money actually on deposit to the credit of the association, 
or due thereto. 

Fourth. Liabilities to the stockholders of the associa- 
tion for dividends and reserve profits. 

Fifth. Liabilities incurred under the provisions of the 
Federal reserve Act.^ 
1916* fo^stat! The discount and rediscount and the purchase and sale 
L., 753. by any Federal reserve bank of any bills receivable and 

of domestic and foreign bills of exchange, and of accept- 
ances authorized by this Act, shall be subject to such 
restrictions, limitations, and regulations as may be im- 
posed by the Federal Reserve Board. 

That in addition to the powers now vested by law in 
national banking associations organized under the laws 
of the United States any such association located and do- 
ing business in any place the population of which does 
not exceed five thousand inhabitants, as shown by the last 
preceding decennial census, may, under such rules and 
regulations as may be prescribed by the Comptroller of 
the Currency, act as the agent for any fire, life, or other 
insurance company authorized by the authorities of the 
State in which said bank is located to do business in said 
State, by soliciting and selling insurance and collecting 
premiums on policies issued by such company; and may 
receive for services so rendered such fees or commissions 
as may be agreed upon between the said association and 
the insurance company for which it may act as agent; 
and may also act as the broker or agent for others in 
making or pi;ocuring loans on real estate located within 

* Or by bonds and notes of War Finance Corporation. See sec- 
tion 13, War Finance Corporation Act, approved Apr. 5, 1918. 

' Also liabilities incurred under the provisions of the War 
Finance Corporation Act. See section 20, War Finance Corpora- 
tion Act, approved Apr. 5, 1918. 



THE FEDERAL, RESERVE ACT. 147 

one hundred miles of the place in which said bank may 
be located, receiving for such services a reasonable fee 
or commission: Provided, however. That no such bank 
shall in any case guarantee either the principal or inter- 
est of any such loans or assume or guarantee the payment 
of any premium on insurance policies issued through its 
agency by its principal: And provided further, That 
the bank shall not guarantee the truth of any statement 
made by an assured in filing his application for insur- 
ance. 

Any member bank may accept drafts or bills of ex- 
change drawn upon it having not more than three months' 
sight to run, exclusive of days of grace, drawn under 
regulations to be prescribed by the Federal Reserve Board 
by banks or bankers in foreign countries or dependencies 
or insular possessions of the United States for the pur- 
pose of furnishing dollar exchange as required by the 
usages of trade in the respective countries, dependencies, 
or insular possessions. Such drafts or bills may be ac- 
quired by Federal reserve banks in such amounts and 
subject to such regidations, restrictions, and limitations 
as may be prescribed by the Federal Reserve Board : 
Provided, however. That no member bank shall accept 
such drafts or bills of exchange referred to this para- 
graph for any one bank to an amount exceeding in the 
aggregate ten per centum of the paid-up and unimpaired 
capital and surplus of the accepting bank unless the 
draft or bill of exchange is accompanied by documents 
conveying or securing title or by some other adequate 
security: Provided further. That no member bank shall 
accept such drafts or bills in an amount exceeding at any 
time the aggregate of one-half of its paid-up and unim- 
paired capital and surplus. 

OPEN MARKET OPERATIONS. 

614. Sec. 14. — Any Federal reserve bank may, imder Act Dec. 23, 
ndes and regulations prescribed by the Federal Reserve ^^^g^^-gt^at^- ^l! 
Board, purchase and sell in the open market, at home or 264. 
abroad, either from or to domestic or foreign iDanks, firms, lote* 39^'stat! 
corporations, or individuals, cable transfers and bankers' ^•' '^^^• 
acceptances and bills of exchange of the kinds and ma- 
turities by this Act made eligible for rediscount, with or 
without the indorsement of a member bank. 
Every Federal reserve bank shall have power: 
{a) To deal in gold coin and bullion at home or abroad, 
to make loans thereon, exchange Federal reserve notes 
for gold, gold coin, or gold certificates, and to contract for 
loans of gold coin or bullion, giving therefor, when neces- 
sary, acceptable security, including the hypothecation of 
United States bonds or other securities which Federal 
reserve banks are authorized to hold: 



148 THE FEDERAL RESERVE ACT. 

(b) To buy and sell, at home or abroad, bonds and notes 
of the United States, and bills, notes, revenue bonds, and 
warrants with a maturity from date of purchase of not 
exceeding six months, issued in anticipation of the col- 
lection of taxes or in anticipation of the receipt of assured 
revenues by any State, county, district, political subdivi- 
sion, or municipality in the continental United States, in- 
cluding irrigation, drainage and reclamation districts, 
such purchases to be made in accordance with rules and 
regulations prescribed by the Federal Reserve Board ; 

(c) To purchase from member banks and to sell, with 
or without its indorsement, bills of exchange arising out 
of commercial transactions, as hereinbefore defined ; 

(d) To establish from time to time, subject to review, 
and determination of the Federal Eeserve Board, rates 
of discount to be charged by the Federal reserve bank for 
each class of paper, which shall be fixed with a view of 
accommodating commerce and business; 

Act June 21, («) To establish accounts with other Federal reserve 
)9i7, sec. 6. banks for exchange purposes and, with the consent or 
upon the order and direction of the Federal Reserve 
Board and under regulations to be prescribed by said 
board, to open and maintain accounts in foreign coun- 
tries, appoint correspondents, and establish agencies in 
such countries wheresoever it may be deemed best for 
the purpose of purchasing, selling, and collecting bills of 
exchange, and to buy and sell, with or without its indorse- 
ment, through such correspondents or agencies, bills of 
exchange (or acceptances) arising out of actual commer- 
cial transactions which have not more than ninety days 
to run, exclusive of days of grace, and which bear the 
signature of two or more responsible parties, and, with 
the consent of the Federal Reserve Board, to open and 
maintain banking accounts for such foreign correspond- 
ents or agencies. Whenever any such account has been 
opened or agency or correspondent has been appointed 
by a Federal reserve bank, with the consent of or under 
the order and direction of the Federal Reserve Board, 
any other Federal reserve bank may, with the consent 
and approval of the Federal Reserve Board, be permitted 
to carry on or conduct, through the Federal reserve bank 
07 ning such account or appointing such agency or 
correspondent, any transaction authorized by this sec- 
tion under rules and regulations to be prescribed by the 
board 

GOVERNMENT DEPOSITS. 



19^3* ?ec' li- ^^^' ^^^* ^^' — '^^^ moneys held in the general fund of 
38^' 'staV L.', the Treasury, except the five per centum fund for the re- 
demption of outstanding national-bank notes and the 
funds provided in this act for the redemption of Federal 
reserve notes may, upon the direction of the Secretary of 



265. 



THE FEDERAL RESER^^ ACT. 149 

the Treasury, be deposited in Federal reserve banks, 
which banks, when required by the Secretary of the 
Treasury, shall act as fiscal agents of the United States; ^ 
and the revenues of the Government or any part thereof 
may be deposited in such banks, and disbursements may 
be made by checks drawn against such deposits. 

No public funds of the Philippine Islands, or. of the 
postal savings, or any Government funds, shall be de- 
posited in the continental United States in any bank not 
belonging to the system established by this act : ^ Pro- 
vided^ however^ That nothing in this act shall be con- 
strued to deny the right of the Secretary of the Treasury 
to use member banks as depositories. 

NOTE ISSUES. 

FEDERAL EESERTE NOTES AUTHORIZED. 

616. Sec. 16. — Federal reserve notes, to be issued at the jg^^g^ ^^^^ ^l\ 
discretion of the Federal Reserve Board for the purpose 38 'stat. l.| 
of making advances to Federal reserve banks through the ~ 
Federal reserve agents as hereinafter set forth and for no 
other purpose, are hereby authorized. The said notes 
shall be obligations of the United States and shall be re- 
ceivable by all national and member banks and Federal 
reserve banks and for all taxes, customs, and other public 
dues. They shall be redeemed in gold on demand at the 
Treasury Department of the United States, in the city of 
Washington, District of Columbia, or in gold or lawful 
money at any Federal reserve bank. 

CXDLX,ATERAL SECURITY. 

APPLICATIONS FOR FEDERAL RESERYE NOTES. 

616a. Any Federal reserve bank may make application ^^^ ^^<^- ,23- 

1 -i IT-. 11 ,/•! .cji lyio, sec. lb; 

to the local Federal reserve agent lor such amount ot the 38 stat. l.. 
Federal reserve notes hereinbefore provided for as it may "^ Act Sept. 7, 
require. Such application shall be accompanied with a L^^^if ^ ^*^*- 
tender to the local Federal reserve agent of collateral in Act" June 21. 
amount equal to the sum of the Federal reserve notes ^ ^^' ®'^*^' ^' 
thus applied for and issued pursuant to such application. 
The collateral security thus offered shall be notes, drafts, 
bills of exchange, or acceptances acquired under the pro- 
visions of section thirteen of this act, or bills of exchange 
indorsed by a member bank of any Federal reserve dis- 

* Under War Finance Corporation act approved Apr. 5, 191S, as 
amended by act of Mar. 3, 1919, Federal reserve banl^s may also 
act as fiscal agents of the War Finance Corporation. 

* Under section 7 of the act approved Apr. 24, 1917, section S of 
the act approved Sept. 24, 1917, and section 8 of the act approved 
Apr. 4, 1918, the proceeds of sale of Liberty bonds of the first, 
second, and third issues may be deposited in nonmember banks. 
The act of May 18, 1916, amending the postal saviujxs act, author- 
izes the deposit of postal savings funds in nonmember banks. 



150 THE FEDERAL, EESERVE ACT. 

trict and purchased under the provisions of section four- 
teen of this act, or bankers' acceptances purchased under 
the provisions of said section fourteen, or gold or gold 
certificates ; but in no event shall such collateral security, 
■whether gold, gold certificates, or eligible paper, be less 
than the amount of Federal reserve notes applied for.^ 
The Federal reserve agent shall each clay notify the Fed- 
eral Reserve Board of all issues and withdrawals of Fed- 
eral reserve notes to and by the Federal reserve bank to 
which he is accredited. The said Federal Reserve Board 
may at any time call upon a Federal reserve bank for 
additional security to protect the Federal reserve notes 
issued to it. 

RESERVE REQUIREMENTS FOR FEDERAL RESERVE 
BANKS. 

1913* ^ec' li' ®1^^- Every Federal reserve bank shall maintain re- 
38 Stat.' L.) serves in gold or lawful money of not less than thirty- 
'^Aet June 21, fi'^'s per ceutum against its deposits and reserves in gold 
1917. sec. 7. of uot less than forty per centum against its Federal re- 
serve notes in actual circulation: Provided, hoivever, 
That when the Federal reserve agent holds gold or gold 
certificates as collateral for Federal reserve notes issued 
to the bank such gold or gold certificates shall be counted 
as part of the gold reserve which such bank is required 
to maintain against its Federal reserve notes in actual 
circulation. 

ISSIE AND REDEMPTION OF FEDERAL RESERVE NOTES. 
NO FEDERAL RESERVE BANK PERMITTED TO PAY OUT 
NOTES ISSUED THROUGH ANOTHER FEDERAL RESERVE 
BANK. 

Act Dec. 23, 616c. Notes SO paid out shall bear upon their faces a 
si^^'st^a^*!* ^L.; distinctive letter and serial number which shall be as- 
~^tct June 21 signed by the Federal Reserve Board to each Federal 
1917, sec. 7. ' reserve bank. "Whenever Federal reserve notes issued 
through one Federal reserve bank shall be received by 
another Federal reserve bank, they shall be promptly re- 
turned for credit or redemption to the Federal reserve 
bank through which they were originally issued or, upon 
direction of such Federal reserve bank, they shall be for- 
warded direct to the Treasurer of the United States to be 
retired. No Federal reserve bank shall pay out notes 
issued through another under penalty of a tax of ten per 
centum upon the face value of notes so paid out. Notes 
presented for redemption at the Treasury of the United 
States shall be paid out of the redemption fund and re- 
turned to tlic Federal reserve banks through which they 
were originally issued, and thereupon such Federal re- 

* Under section 13 of War Finance Corporation act approved 
Apr. 5, 1918, notes secured by War Finance Corporation bonds 
may be used to same extent as collateral, as notes secured by 
United States bonds. 



THE FEDERAL RESERVE ACT. 151 

serve bank shall, upon demand of the Secretary of the 
Treasury, reimburse such redemi^tion fund in lawful 
money or, if such Federal reserve notes have been re- 
deemed by the Treasurer in gold or gold certificates, then 
such funds shall be reimbursed to the extent deemed 
necessary by the Secretary of the Treasury in gold or 
gold certificates, and such Federal reserve bank shall, so 
long as any of its Federal reserve notes remain outstand- 
ing, maintain with the Treasurer in gold an amount suffi- 
cient in the judgment of the Secretary to provide for all 
redemptions to be made by the Treasurer. Federal re- 
serve notes received by the Treasurer otherwise than 
for redemption may be exchanged for gold out of the re- 
demption fund hereinafter provided and returned to the 
reserve bank through which they were originally issued, 
or they may be returned to such bank for the credit of 
the United States. Federal reserve notes unfit for circu- 
lation shall be returned by the Federal reserve agents to 
the Comptroller of the Currency for cancellation and 
destruction. 

DEPOSITS OF GOLD ITITH TREASURER FOR REDEMPTION 
OF FEDERAL RESERYE NOTES. 

616d. The Federal Reserve Board shall require each jgf f f^f- 2^3. 
Federal reserve bank to maintain on deposit in the Treas- 38 'stat.' l.', 
ury of the United States a sum in gold sufficient in the "^Ict June 21, 
judgment of the Secretary of the Treasury for the re- ^^^'^> ^ec 7. 
demption of the Federal reserve notes issued to such bank, 
but in no event less than five per centum of the total 
amount of notes issued less the amount of gold or gold 
certificates held by the Federal reserve agent as collateral 
security; but such deposit of gold shall be counted and 
included as part of the forty per centum reserve herein- 
before required. 

FEDERAL RESERYE BOARD MAY GRANT OR REJECT AP- 
PLICATION OF FEDERAL RESERYE BANK FOR FED- 
ERAL RESERYE NOTES. FEDERAL RESERYE NOTES 
FIRST LIEN ON ALL THE ASSETS OF THE BANK. 

616e. The board shall have the right, acting through ^g^^t Dec 2^3, 
the Federal reserve agent, to grant in whole or in part, 38 'stat.' l.', 
or to reject entirely the application of any Federal re- "^Ict June 21, 
serve bank for Federal reserve notes ; but to the extent ^^^'^' ^^c. 7. 
that such application may be granted the Federal Reserve 
Board shall, through its local Federal reserve agent, sup- 
ply Federal reserve notes to the banks so applying, and 
such bank shall be charged with the amount of notes 
issued to it and shall pay such rate of interest as may be 
established by the Federal Reserve Board on only that 
amount of such notes which equals the total amount of 
its outstanding Federal reserve notes less the amount of 
gold or gold certificates held by the Federal reserve agent 
as collateral security. Federal reserve notes issued to any 



152 THE FEDEKAL RESERVE ACT. 

such bank shall, upon delivery, together with such notes 
of such Federal reserve bank as may be issued under sec- 
tion eighteen of this act upon security of United States 
two per centum Government bonds, become a first and 
paramount lien on all the assets of such bank. 

REDUCTION OF NOTE ISSUES. 

Act Dec. 23, 616f. Any Federal reserve bank may at any time reduce 
sl^^'sfaf' ^L * i^ liability for outstanding Federal reserve notes by 
267. ^ ' depositing with the Federal reserve agent its Federal re- 

1917, sec?\r ' serve notes, gold, gold certificates, or lawful money of the 
United States. Federal reserve notes so deposited shall 
not be reissued, except upon compliance with the condi- 
tions of an original issue. 

The Federal reserve agent shall hold such gold, gold 
certificates, or lawful money available exclusively for ex- 
change for the oustanding Federal reserve notes when 
offered by the reserve bank of which he is a director. 
Upon the request of the Secretary of the Treasury the 
Federal Reserve Board shall require the Federal reserve 
agent to transmit to the Treasurer of the United States 
so much of the gold held by him as collateral security for 
Federal reserve notes as may be required for the exclusive 
purpose of the redemption of such Federal reserve notes, 
but such gold when deposited with the Treasurer shall be 
counted and considered as if collateral security on deposit 
with the Federal reserve agent. 

SUBSTITUTION OF COLLATERAL. ~ ' 

Act Dec. 23, 616g. Any Federal reserve bank may at its discretion 
1913, sec. 16 ; withdraw collateral deposited with the local Federal re- 
267. " " serve agent for the protection of its Federal reserve notes 
1917* se"?\f ■^' issued to it and shall at the same time substitute therefor 
other collateral of equal amount with the approval of the 
Federal reserve agent under regulations to be prescribed 
by the Federal Eeserve Board. Any Federal reserve bank 
may retire any of its Federal reserve notes by depositing 
them with the Federal reserve agent or with the Treasurer 
of the United States, and such Federal reserve bank shall 
thereupon be entitled to receive back the collateral de- 
posited with the Federal reserve agent for the security of 
such notes. Federal reserve banks shall not be required 
to maintain the reserve or the redemption fund hereto- 
fore provided for against Federal reserve notes which 
have been retired. Federal reserve notes so deposited 
shall not be reissued except upon compliance with the 
conditions of an original issue. 

All Federal reserve notes and all gold, gold certificates, 
and lawful money issued to or deposited with any Fed- 
eral reserve agent under the provisions of the Federal re- 
serve act shall hereafter be held for such agent, under 



THE FEDERAL RESERVE ACT. 153 

such rules and regulations as the Federal Reserve Board 
may prescribe, in the joint custody of himself and the 
Federal reserve bank to which he is accredited. Such 
agent and such Federal reserve bank shall be jointly 
liable for the safe-keeping of such Federal reserve notes, 
gold, gold certificates, and lawful money. Nothing 
herein contained, however, shall be construed to prohibit 
a Federal reserve agent from depositing gold or gold 
certificates with the Federal Eeserve Board, to be held 
by such board subject to his order, or with the Treasurer 
of the United States for the purposes authorized by law, 

PEEPARATION OF FEDERAL RESERYE NOTES. PLATES 
AND DIES TO BE UNDER CONTROL OF COMPTROLLER 
OF CURRENCY. WHERE NOTES ARE TO BE DEPOSITED. 

616h. In order to furnish suitable notes for circulation Act Dec. 23, 
as Federal reserve notes, the Comptroller of the Cur- sl^^'st^at^' ^l ' 
rency shall, under the direction of the Secretary of the 267. 
Treasury, cause plates and dies to be engraved in the i9i8rs"ec.''3.^^' 
best manner to guard against counterfeits and fraudu- 
lent alterations, and shall have printed therefrom and 
numbered such quantities of such notes of the denomina- 
tions of $5, $10, $20, $50, $100, $500, $1,000, $5,000, $10,000, 
as may be required to supply the Federal reserve banks. 
Such notes shall be in form and tenor as directed by the 
Secretary of the Treasury under the provisions of this 
Act and shall bear the distinctive numbers of the several 
Federal reserve banks through which they are issued. 

When such notes have been prepared, they shall be 
deposited in the Treasurj^ or in the subtreasury or mint 
of the United States nearest the place of business of each 
Federal reserve bank and shall be held for the use of 
such bank subject to the order of the Comptroller of the 
Currency for their delivery, as provided by this Act. 

The plates and dies to be procured by the Comptroller 
of the Currency for the printing of such circulating 
notes shall remain under his control and direction, and 
the expenses necessarily incurred in executing the laws 
relating to the procuring of such notes, and all other 
expenses incidental to their issue and retirement, shall 
be paid by the Federal reserve banks, and the Federal 
Reserve Board shall include in its estimate of expenses 
levied against the Federal reserve banks a sufficient 
amount to cover the expenses herein provided for. 

The examination of plates, dies, bed pieces, and so 
forth, and regulations relating to such examination of 
plates, dies, and so forth, of national-bank notes provided 
for in section fifty-one hundred and seventy-four Revised 
Statutes, is hereby extended to include notes herein pro- 
vided for. 



154 THE FEDERAL RESERVE ACT. 

APPEOPRIATION FOR EXPENSE OF PRINTING NATIONAL- 
BANK NOTES MAY BE USED FOR PRINTING FEDERAL 
RESERVE NOTES. 

1913? ?ec?' i^6^i 6^6i* -^^J appropriation heretofore made out of the 
38^ Stat." L.; general funds of the Treasury for engraving plates and 
dies, the purchase of distinctive paper, or to cover any 
other expense in connection with the printing of na- 
tional-bank notes or notes provided for by the Act of 
May thirtieth, nineteenth hundred and eight, and any 
distinctive paper that may be on hand at the time of the 
passage of this Act may be used in the discretion of the 
Secretary for the purposes of this Act, and should the 
appropriations heretofore made be insufficient to meet 
the requirements of this Act in addition to circulating 
notes provided for by existing law, the Secretary is here- 
by authorized to use so much of any funds in the Treas- 
ury not otherwise appropriated for the purpose of fur- 
nishing the notes aforesaid: Provided, however, That 
nothing in this section contained shall be construed as 
exempting national banks or Federal reserve banks from 
their liability to reimburse the United States for any ex- 
penses incurred in printing and issuing circulating notes. 

WHEN FEDERAL RESERVE BANK SHALL RECEIVE 
CHECKS AND DRAFTS ON DEPOSIT AT PAR. 

lots! sec!" 1^6^; ^^^J- Every Federal reserve bank shall receive on de- 
S8 'stat. L., posit at par from member banks or from Federal reserve 
banks checks and drafts drawn upon any of its depos- 
itors, and when remitted by a Federal reserve bank, 
checks and drafts drawn by any depositor in any other 
Federal reserve bank or member bank upon funds to the 
credit of said depositor in said reserve bank or member 
bank. 

CHARGES FOR COLLECTION AND FOR SALE OF EX- 
CHANGE. 

im^ ^ec' iQ- ^1^^- Nothing herein contained shall be construed as 
38 'stat." L.', prohibiting a member bank from charging its actual 
^^^' expense incurred in collecting and remitting funds, or 

for exchange sold to its patrons. The Federal Reserve 
Board shall, by rule, fix the charges to be collected by 
the member banks from its patrons whose checks are 
cleared through the Federal reserve bank and the charge 
which may be imposed for the service of clearing or col- 
lection rendered by the Federal reserve bank. 

FEDERAL RESERVE BOARD MAT EXERCISE FUNCTIONS 
OF A CLEARING HOUSE AND MAY REQUIRE FEDERAL 
RESERVE BANKS TO EXERCISE SUCH FUNCTIONS. 

6161. The Federal Reserve Board shall make and pro- 
mulgate from time to time regulations governing the 
transfer of funds and charges therefor among Federal 



THE FEDERAL, RESERVE ACT. 155 

reserve banl« and their branches, and may at its dis- 
cretion exercise the functions of a clearing house for 
such Federal reserve banks, or may designate a Federal 
reserve bank to exercise such functions, and may also 
require each such bank to exercise the functions of a 
clearing house for its member banks. 

SECRETARY OF THE TREASURY TO RECEIYE DEPOSITS 
OF GOLD COIN OR GOLD CERTIFICATES WITH THE 
TREASURER OR ASSISTANT TREASURER OF UNITED 
STATES WHEN TENDERED BY ANY FEDERAL RESERVE 
BANK OR FEDERAL RESERVE AGENT FOR CREDIT TO 
ITS OR HIS ACCOUNT WITH THE FEDERAL RESERVE 
BOARD. 

616m. That the Secretary of the Treasury is hereby igf^^g-J^^I ^L 
authorized and directed to receive deposits of gold coin or 
of gold certificates with the Treasurer or any assistant 
treasurer of the United States when tendered by any 
Federal reserve bank or Federal reserve agent for credit 
to its or his account with the Federal Reserve Board. 
The Secretary shall prescribe by regulation the form of 
receipt to be issued by the Treasurer or Assistant Treas- 
urer to the Federal reserve bank or Federal reserve agent 
making (he deposit, and a duplicate of such receipt shall 
be delivered to the Federal Reserve Board by the Treas- 
urer at Washington upon proper advices from any as- 
sistant treasurer that such deposit has been made. De- 
posits so made shall be held subject to the orders of 
the Federal Reserve Board and shall be payable in gold 
coin or gold certificates on the order of the Federal 
Reserve Board to any Federal reserve bank or Federal 
reserve agent at the Treasury or at the Subtreasury of 
the United States nearest the place of business of such 
Federal reserve bank or such Federal reserve agent : Pro- 
vided^ however^ That anj^ expense incurred in shipping 
gold to or from the Treasury or subtreasuries in order to 
make such payments, or as a result of making such pay- 
ments, shall be paid by the Federal Reserve Board and 
assessed against the Federal reserve banks. The order 
used by the Federal Reserve Board in making such pay- 
ments shall be signed by the governor or vice governor, 
or such other officers or members as the board may by 
regulation prescribe. The form of such order shall be 
approved by the Secretary of the Treasury. 

The expenses necessarily incurred in carrying out these 
provisions, including the cost of the certificates or re- 
ceipts issued for deposits received, and all expenses inci- 
dent to the handling of such deposits shall be paid by 
the Federal Reserve Board and included in its assess- 
ments against the several Federal reserve banks. 

Gold deposits standing to the credit of any Federal 
reserve bank with the Federal Reserve Board shall, at 
the option of said bank, be counted as part of the lawful 
reserve which it is required to maintain against outstand- 



156 THE FEDERAL RESERVE ACT. 

ing Federal reserve nx>tes, or as part of the reserve it is 
required to maintain against deposits. 

Nothing in this section shall be construed as amend- 
ing section six of the act of March fourteenth, nineteen 
hundred, as amended by the acts of March fourth, nine- 
teen hundred and seven, March second, nineteen hundred 
and eleven, and June twelfth, nineteen hundred and six- 
teen, nor shall the provisions of this section be construed 
to apply to the deposits made or to the receipts or cer- 
tificates issued under those acts. 

NATIONAL BANKS NOT REQUIRED TO MAKE DEPOSIT OF 
UNITED STATES BONDS PRIOR TO COMMENCEMENT OF 
BUSINESS. 

1913* ?ec^' u- ^^^' ^^^' ^'^' — ^^ much of the provisions of section 
38 Stat." L.| fifty-one hundred and fifty-nine of the Eevised Statutes 
"^ict June 21, ^f the United States, and section four of the act of June 
1917, sec, 9. ' twentieth, eighteen hundred and seventy-four, and sec- 
tion eight of the act of July twelfth, eighteen hundred 
and eighty-two, and of any other provisions of existing 
statutes as require that before any national banking asso- 
ciation shall be authorized to commence banking busi- 
ness it shall transfer and deliver to the Treasurer of the 
United States a stated amount of United States regis- 
tered bonds, and so much of those provisions or of any 
other provisix3ns of existing statutes as require any na- 
tional banking association now or hereafter organized to 
maintain a minimum deposit of such bonds with the 
Treasurer is hereby repealed. 

REFUNDING BONDS. 

RETIREMENT OF CIRCULATING NOTES. 

igfs* sec*^' 1^8^' ^^^- ^^^' ^^' — -^fter two years from the passage of this 
38 Stat.' L.', Act, and at any time during a period of twenty years 
thereafter, any member bank desiring to retire the whole 
or any part of its circulating notes, may file with the 
Treasurer of the United States an application to sell for 
its account, at par and accrued interest, United States 
bonds securing circulation to be retired. 

PURCHASE OF UNITED STATES BONDS BY FEDERAL RE- 
SERVE BANKS. 

19^3* ?ec' il^' ^^^^- "^^^^ Treasurer shall, at the end of each quarterly 
38 'stat.' L.; period, furnish the Federal Reserve Board with a list of 
such applications, and the Federal Reserve Board may, 
in its discretion, require the Federal reserve banks to 
purchase such bonds from the banks whose applications 
have been filed with the Treasurer at least ten days before 
the end of any quarterly period at which the Federal 
Reserve Board may direct the purchase to be made: 
Provided, That Federal reserve banks shall not be per- 
mitted to purchase an amount to exceed $25,000,000 of 
such bonds in any one year, and wliich amount shall 



THE FEDERAL RESERVE ACT. 157 

include bonds acquired under section four of this Act by 
the Federal reserve bank. 

Provided further^ That the Federal Reserve Board 
shall allot to each Federal reserve bank such proportion 
of such bonds as the capital and surplus of such bank 
shall bear to the aggregate capital and surplus of all tho 
Federal reserve banks. 

Upon notice from the Treasurer of the amount of bonds 
so sold for its account, each member bank shall duly 
assign and transfer, in writing, such bonds to the Federal 
reserve bank purcliasing the same, and such Federal 
reserve bank shall, thereupon, deposit lawful money with 
the Treasurer of the United States for the purchase price 
of such bonds, and the Treasurer shall pay to the member 
bank selling such bonds any balance due after deducting 
a sufficient sum to redeem its outstanding notes secured 
by such bonds, which notes shall be canceled and perma- 
nently retired when redeemed. 

ISSUE OF CIRCULATING NOTES TO FEDERAL RESERTE 
BANKS ON SECURITY OF UNITED STATES BONDS. CIR- 
CULATING NOTES SO ISSUED OBLIGATIONS OF FED- 
ERAL RESERVE BANK. 

618b. The Federal reserve banks purchasing such bonds _4S* ^^^- ?o' 

. , , ^ , f • ^ j_- lylo, sec. 1» ; 

shall be permitted to take out an amount oi circulating ss stat. l., 
notes equal to the par value of such bonds. ^^^' 

Upon the deposit with the Treasurer of the United 
States of bonds so purchased, or any bonds with the cir- 
culating privilege acquired under section four of this act, 
any Federal reserve bank making such deposit in the 
manner provided by existing law, shall be entitled to 
receive from the Comptroller of the Currency circulating 
notes in blank, registered and countersigned as provided 
by law, equal in amount to the par value of the bonds so 
deposited.^ Such notes shall be the obligations of the 
Federal reserve bank procuring the same, and shall be in 
form prescribed b}' the Secretary of the Treasury, and to 
the same tenor and effect as national-bank notes now 
provided b}' law. They shall be issued and redeemed 
under the same terms and conditions as national-bank 
notes except that they shall not be limited to the amount 
of the capital stock of the Federal reserve bank issuing 
them. 

ISSUE OF ONE-YEAR GOLD NOTES AND THREE PER CENT 
BONDS OF THE UNITED STATES IN EXCHANGE FOR 
TWO PER CENT UNITED STATES BONDS. 

618c. Upon application of any Federal reserve bank, 19^0* ^^^ fi\ 
approved by the Federal Reserve Board, the Secretary ss stat. l.. 
of the Treasury may issue, in exchange for United States 

* Under act of Apr. 23, 1918, Federal reserve banks may issue 
Federal reserve bank notes in any denominations, includin.Er .$1 
find .?2. against the security of United States certificates of iU' 
debtedness to the extent permitted by that act. 



158 THE FEDERAL RESERVE ACT. 

two per centum gold bonds bearing the circulation privi- 
lege, but against which no circulation is outstanding, 
one-year gold notes of the United States without the 
circulation privilege, to an amount not to exceed one- 
half of the two per centum bonds so tendered for ex- 
change, and thirty-year three per centum gold bonds 
without the circulation privilege for the remainder of the 
two per centum bonds so tendered: Provided, That at 
the time of such exchange the Federal reserve bank ob- 
taining such one-year gold notes shall enter into an obli- 
gation with the Secretary of the Treasury binding itself 
to purchase from the United States for gold at the ma- 
turity of such one-year notes, an amount equal to those 
delivered in exchange for such bonds, if so requested by 
the Secretary, and at each maturity of one-year notes so 
purchased by such Federal reserve bank, to purchase 
from the United States such an amount of one-year notes 
as the Secretary may tender to such bank, not to exceed 
the amount issued to such bank in the first instance, in 
exchange for the two per centum United States gold 
bonds; said obligation to purchase at maturity such 
notes shall continue in force for a period not to exceed 
thirty years. 

For the purpose of making the exchange herein pro- 
vided for, the Secretary of the Treasury is authorized to 
issue at par Treasury notes in coupon or registered form 
as he may prescribe in denominations of one hundred 
dollars, or any multiple thereof, bearing interest at the 
rate of three per centum per annum, payable quarterly, 
such Treasury notes to be payable not more than one year 
from the date of their issue in gold coin of the present 
standard value, and to be exempt as to principal and 
interest from the payment of all taxes and duties of the 
United States except as provided by this act, as well as 
from taxes in any form by or under State, municipal, or 
local authorities. And for the same purpose, the Secre- 
tary is authorized and empowered to issue United States 
gold bonds at par, bearing three per centum interest pay- 
able thirty years from date of issue, such bonds to be of 
the same general tenor and effect and to be issued under 
the same general terms and conditions as the United 
States three per centum bonds without the circulation 
privilege now issued and outstanding 

EXCHANGE OF THREE PER CENT BONDS FOR ONE-YEAR 
GOLD NOTES. 

618q. Upon application of any Federal reserve bank, 
approved by the Federal Reserve Board, the Secretary 
may issue at par such three per centum bonds in ex- 
change for the one-year gold notes herein provided for. 



THE FEDERAL RESERVE ACT* 159 

BANK RESERVES. 

DEMAND AND TIME DEPOSITS DEFINED— RESERYE RE- 
QUIREMENTS—WHEN EFFECTIVE. 

619. Sec. 19. — Demand deposits within the meaning of j^^^* ^^*=- ^^^r 
this act shall comprise all deposits payable within thirty 38 'stat.' l.', 
days, and time deposits shall comprise all deposits pay- Act June 21, 
able after thirty days, all savings accounts and cer- ^^i"^' ^^^- i^* 
tificates of deposit which are subject to not less than 
thirty days' notice before payment, and all postal savings 
deposits.^ 

Every bank, banking asociation, or trust company 
which is or which becomes a member of any Federal re- 
serve bank shall establish and maintain reserve balances 
with its Federal reserve bank as follows: 

RESERYE REQUIREMENTS FOR BANKS NOT IN RESERYE 
CITIES. 

619a. (a) If not in a reserve or central reserve city, Act Dec. 2.3. 
as now or hereafter defined, it shall hold and maintain 38 'stat." l.) 
with the Federal reserve bank of its district an actual net ^"^^^ june 21 
balance equal to not less than seven per centum of the i9i7, sec. 10. ' 
aggregate amount of its demand deposits and three per 
centum of its time deposits. 

RESERYE REQUIREMENTS FOR BANKS IN RESERYE 
CITIES. 

619b. (h) If in a reserve city, as now or hereafter ^^Act Dec. ^2^3. 
defined, it shall hold and maintain with the Federal 38 stat.' l.' 
reserve bank of its district an actual net balance equal to "'Act Aug. 15. 
not less than ten per centum of the aggregate amount of J^^i'^^j^^^^t^*' 
its demand deposits and three per centum of its time Act June 21, 
deposits: Provided, hoicever, That if located in the outly- ^^ict lept.^26, 
ing districts of a reserve city or in territory added to such i^is, sec. 4. 
a city by the extension of its corporate charter, it may, 
upon the affirmative vote of five members of the Federal 
Reserve Board, hold and maintain the reserve balances 
specified in paragraph {a) hereof. 

KESERYE REQUIREMENTS FOR BANKS IN CENTRAL RE- 
SERYE CITIES. 

619c. {c) If in a central reserve city, as now or here- Act Dec. 23, 
after defined, it shall hold and maintain with the Federal ss^^'staT ^l.! 
reserve bank of its district an actual net balance equal -"^^^^^ ^^„ jg' 
to not less than thirteen per centum 'of the aggregate i9i4: *38''stat! 
amount of its demand deposits and three per centum of ^" Act^June 21. 
its time deposits : Provided, however, That if located in ^^^^/^ ^'^f-, ^\-^ 
the outlying districts of a central reserve city or in tern- lo'is, sec. 4. " ' 

* Government deposits other than postal savings deposits are 
not subject to reserve reciuirenients. See section 7 of First Lib- 
erty Bond act, approved Apr. 24 , 1917 ; section 8 of Second Liberty 
Bond act, approved Sept. 24, 1917, and section 8 of Third Liberty 
Bond act, approved Apr. 4, 1918. 



160 THE FEDERAL RESERVE ACT. 

tory added to such city by the extension of its corporate 
charter, it may, upon the affirmative vote of five members 
of the Federal Reserve Board, hold and maintain the 
reserve balances specified in paragraphs {a) or (&) 
thereof. 

MEMBER BANK FORBIDDEN TO KEEP ON DEPOSIT WITH 
NONMEMBER BANK A SUM IN EXCESS OF TEN PER 
CENT OF ITS OWN CAPITAL AND SURPLUS OR TO SE- 
CURE DISCOUNTS FOR NONMEMBER BANK. 

1913* s^*^' 1^9 • 619d. No member bank shall keep on deposit with any 
S8 'stat.' L.', State bank or trust company which is not a member bank 
^^Act Aug. 15, a sum in excess of ten per centum of its own paid-up 
L^^l^i^^ ^t^t- capital and surplus. No member bank shall act as the 
Act June 21, medium or agent of a nonmember bank in applying for 
1917, sec. 10. ^^, receiving discounts from a Federal reserve bank under 

the provisions of this Act, except by permission of the 

Federal Reserve Board. 

WITHDRAWAL OF RESERYE BY MEMBER BANK. 

Act Dec. 23, 619e. The required balance carried by a member bank 
ss' 'stau L.', with a Federal reserve bank may, under the regulations 
^^Act. Aug. 15, and subject to such penalties as may be prescribed by the 
1914 ;* 38 "stat! Federal Reserve Board, be checked against and with- 
^■'Act^june 21, drawu by such member bank for the purpose of meeting 
1917, sec. 10, existing liabilities : Provided, however, That no bank 
shall at any time make new loans or shall pay any divi- 
dends unless and until the total balance required by law 
is fully restored. 

RESERYE REQUIREMENT— HOW ESTIMATED. 

Act Dec. 23, 619f. In estimating the balances required by this Act, 
38^' stat.* L.', the net difference of amounts due to and from other 
^Act Aug. 15, banks shall be taken as the basis for ascertaining the 
1914; 38 stat! deposits against which required balances with Federal 

Act June 21, rescrve banks shall be determined, 

1917, sec. 10. 

RESERYE REQUIREMENTS FOR NATIONAL BANKS LO- 
CATED IN ALASKA OR OUTSIDE THE CONTINENTAL 
UNITED STATES. 

1913* sec^" 1^9^' 619g. National banks, or banks organized under local 

38 stat." L.', laws, located in Alaska or in a dependency or insular 

^^Act Aug. 15, possession or any part of the United States outride the 

1914^^^38 stat. continental United States may remain nonmember banks. 

Act June 21, and shall in that event maintain reserves and comply 

1917, sec. 10, ^-^j^ rj^Yi the conditions now provided by law regulating 

them ; or said banks may, with the consent of the Reserve 

Board, become member banks of any one of the reserve 

districts, and shall in that event take stock, maintain 

reserves, and be subject to all the other provisions of this 

act. 



THE FEDERAL RESERVE ACT. 161 

REDEMPTION FUND WITH TREASURER NOT TO BE 
COUNTED AS RESERVE. 

620. Sec. 20. — So much of sections two and three of the .A9.^ P^<^- 23. 
Act of June twentieth, eighteen hundred and seventy- 38 stat l., 
four, entitled " An Act fixing the amount of United States ^^^' 

notes, providing for a redistribution of the national-bank 
currency, and for other purposes," as provides that the 
fund deposited by any national banking association with 
the Treasurer of the United States for the redemption of 
its notes shall be counted as a part of its lawful reserve 
as provided in the Act aforesaid, is hereby repealed. And 
from and after the passage of this Act such fund of five 
per centum shall in no case be counted by any national 
banking association as a part of its lawful reserve. 

BANK EXAMINATIONS. 

APPOINTMENT AND POWERS OF EXAMINERS— ACCEPT- 
ANCE OF REPORTS OF EXAMINATIONS BY STATE 
AUTHORITY. 

621. Sec. 21.— Section fifty-two hundred and forty, jg^ct Dec. 23, 
United States Revised Statutes, is amended to read as 38 'stat.' l.) 
follows: _ ^'^^' 

The Comptroller of the Currency, with the approval of 
the Secretary of the Treasury, shall appoint examiners 
who shall examine every member bank ^ at least twice in 
each calendar year and oftener if considered necessary: 
Provided, however, That the Federal Reserve Board may 
authorize examination by the State authorities to be 
accepted in the case of State banks and trust companies 
and may at any time direct the holding of a special ex- 
amination of State banks or trust companies that are 
stockholders in any Federal reserve bank. The examiner 
making the examination of any national bank, or of any 
other member bank, shall have power to make a thorough 
examination of all the affairs of the bank, and in doing so 
he shall have power to administer oaths and to examine 
any of the officers and agents thereof under oath and 
shall make a full and detailed report of the condition of 
said bank to the Comptroller of the Currency. 

SALARIES OF BANK EXAMINERS. 

621a. The Federal Reserve Board, upon the recom- Act Dec. 23, 
mendation of the Comptroller of the Currency, shall fix 38 'stot.' "l.'. 
the salaries of all bank examiners and make report thereof ^^^' 
to Congress. The expense of the examinations herein 
provided for shall be assessed by the Comptroller of the 
Currency upon the banks examined in proportion to 
assets or resources held by the banks upon the dates of 
examination of the various banks. 

* Except banks admitted to membership In the system under au- 
thority of section 9 of this act. See section 9 of this act U3 
amended by act approved June 21, 1917. 

Ift4312°— 20 11 



162 THE FEDERAL, RESERVE ACT. 

EXAMINATIONS BY FEDERAL EESERYE BANK. 

1913! sec^' ill ^2 lb. In addition to the examinations made and con- 
272 '^^^' ^-'d^^^ted by the Comptroller of the Currency, every Fed- 
eral reserve bank may, with the approval of the Federal 
reserve agent or the Federal Reserve Board, provide for 
special examination of member banks within its district. 
The expense of such examinations shall be borne by the 
bank examined. Such examinations shall be so con- 
ducted as to inform theFederal reserve bank of the con- 
dition of its member banks and of the lines of credit 
■which are being extended by them. Every Federal re- 
serve bank shall at all times furnish to the Federal Re- 
serve Board such information as may be demanded con- 
cerning the condition of any member bank within the 
district of the said Federal reserve bank. 

No bank shall be subject to any visitatorial powers 
other than such as are authorized by law, or vested in the 
courts of justice or such as shall be or shall have been 
exercised or directed by Congi-ess, or by either House 
thereof or by any cormnittee of Congress or of either 
House duly authorized. 

EXAMINATIONS OF FEDERAL RESERTE BANKS. 

1913* fee' 2^1^' ^^^°' '^^^ Federal Reserve Board shall, at least once 
38 Stat." L.', each year, order an examination of each Federal reserve 
^^^* bank, and upon joint application of ten member banks 

the Federal Reserve Board shall order a special examina- 
tion and report of the condition of any Federal reserve 
bank. 

MEMBER BANK CAN NOT MAKE LOAN OR GRANT A 
GRATUITY TO ANY NATIONAL BANK EXAMINER. 

,^4S* ^^^- ^^' 622. Sec. 22a. — No member bank and no officer, direc- 
38 'stat.' L.', tor, or employee thereof shall hereafter make any loan or 
^^\ct se t 26 S^^^^ ^^J gratuity to any bank examiner. Any bank 
1918, sec? 5. ' officer, director, or employee violating this provision 
shall be deemed guilty of a misdemeanor and shall be 
imprisoned not exceeding one year or fined not more than 
$5,000, or both ; and may be fined a further sum equal to 
the money so loaned or gratuity given. Any examiner 
accepting a loan or gratuity from any bank examined by 
him or from an officer, director, or employee thereof shall 
be deemed guilty of a misdemeanor and shall be im- 
prisoned one year or fined not more than $5,000, or both, 
and may be fined a further sum equal to the money so 
loaned or gratuity given, and shall forever thereafter 
be disqualified from holding office as a national-bank 
examiner. 



THE FEDERAL RESERVE ACT. 163 

NATIONAL BANK EXAMINER CAN NOT PERFORM ANT 
SERVICE FOR COMPENSATION FOR ANY RANK OR 
OFFICER. EXAMINER CAN NOT DISCLOSE THE NAMES 
OF BORROWERS, OR COLLATERAL WITHOUT FIRST 
OBTAINING WRITTEN CONSENT OF COMPTROLLER. 

622b. No national bank examiner shall perform any Act Sept. 26, 
other service for compensation while holding such office ' ^**^ " 
for any bank or officer, director, or employee thereof. 

No examiner, public or private, shall disclose the 
names of borrowers or the collateral for loans of a mem- 
ber bank to other than the proper officers of such bank 
without first having obtained the express permission in 
writing from the Comptroller of the Currency, or from 
the board of directors of such banl^, except when ordered 
to do so by a court of competent jurisdiction, or by 
direction of the Congress of the United States, or of 
either House thereof, or any committee of Congi'ess, or 
of either House duly authorized. Any bank examiner 
violating the provisions of this subsection shall be im- 
prisoned not more than one year or fined not more than 
$5,000, or both. 

PENALTY FOR OFFICER, DIRECTOR, OR EMPLOYEE OF 
MEMBER BANK WHO RECEIVES ANY COMMISSION OR 
GIFT IN CONNECTION WITH ANY LOAN. 

622c. Except as herein provided, any officer, director Act Sept. 26, 
employee, or attorney of a member bank who stipulates ^^^^' ^^'^' ^' 
for or receives or consents or agrees to receive any fee, 
commission, gift, or thing of value from any person, firm, 
or corporation, for procuring or endeavoring to procure 
for such person, firm, or corporation, or for any other 
person, firm, or corporation, any loan from or the pur- 
chase or discount of any paper, note, draft, check, or 
bill of exchange by such member bank shall be deemed 
guilty of a misdemeanor and shall be imprisoned not 
more than one year or fined not more than $5,000, or 
both. 

PURCHASE OF SECURITIES OR PROPERTY FROM ONE OP 
ITS DIRECTORS, OR SALES TO A DIRECTOR BY A MEM- 
BER BANK. 

622d. Any member bank may contract for, or purchase Act Sept. 26. 
from, any of its directors or from any firm of which any ^^^^' '***^ ^" 
of its directors is a member, any securities or other 
property, when (and not otherwise) such purchase is 
made in the regular course of business upon terms not 
less favorable to the bank than those offered to otliers, 
or when such purchase is authorized by a majority of the 
board of directors not interested in the sale of such 
securities or property, such authority to be evidenced 
by the affirmative vote or written assent of such directors : 
Provided, hmvever, That when any director, or firm of 
which any director is a member, acting for or on behalf 



164 THE FEDERAL RESERVE kCT. ' 

of others, sells securities or other property to a member 
bank, the Federal Reserve Board by regulation may, 
in any or all cases, require a full disclosure to be made, 
on forms to be prescribed by it, of all commissions or 
other considerations received, and whenever such director 
or firm, acting in his or its own behalf, sells securities 
or other property to the bank the Federal Reserve Board 
by regulation, may require a full disclosure of all profit 
realized from such sale. 

Any member bank may sell securities or other property 
to any of its directors, or to a firm of which any of its 
directors is a member, in the regular course of business 
on terms not more favorable to such director or firm 
than those offered to others, or when such sale is author- 
ized by a majority of the board of directors of a member 
bank to be evidenced by their affirmative vote or written 
assent: Provided, however, That nothing in this subsec- 
tion contained shall be construed as authorizing member 
banks to purchase or sell securities or other property 
■which such banks are not otherwise authorized by law 
to purchase or sell. 

RATE OF INTEREST PAID DIRECTORS, OFFICERS, OR 
EMPLOYEES NOT TO EXCEED THAT PAID TO OTHER 
DEPOSITORS. 

1918, sec. * 5. ' 622e. No member bank shall pay to any director, officer, 
attorney, or employee a greater rate of interest on the 
deposits of such director, officer, attorney, or employee 
than that paid to other depositors on similar deposits 
with such member bank. 

PENALTY FOR VIOLATION OF ANY OF THE PROVISIONS 
OF SECTION 22 OF THE FEDERAL RESERVE ACT. 

19^8*860^5.^^' 622f. If the directors or officers of any member bank 
shall knowingly violate or permit any of the agents, 
officers, or directors of any member bank to violate any 
of the provisions of this section or regulations of the 
board made under authority thereof, every director and 
officer participating in or assenting to such violation 
shall be held liable in his personal and individual ca- 
pacity for all damages which the member bank, its share- 
holders, or any other persons shall have sustained in con- 
sequence of such violation. 

LIABILITY OF STOCKHOLDERS OF NATIONAL BANKS. 

19^3* 8^cf" 2?: ^23. Sec. 23.— The stockholders of every national bank- 
278 '^**** ^■' ^^^ association shall be held individually responsible for 
all contracts, debts, and engagements of such association, 
each to the amount of his stock therein, at the par value 
thereof in addition to the amount invested in such stock. 
The stockholders in any national banking association 
who shall have transferred their shares or registered the 
transfer thereof within sixty days next before the date of 



THE FEDERAL RESERVE ACT. 165 

the failure of such association to meet its obligations, or 
with knowledge of such impending failure, shall be liable 
to the same extent as if they had made no such transfer, 
to the extent that the subsequent transferee fails to 
meet such liability; but this provision shall not be con- 
strued to affect in any way any recourse which such 
shareholders might otherwise have against those in whose 
names such shares are registered at the time of such 
failure. 

LOANS ON REAL ESTATE. 

624. Sec. 24. — Any national banking association not jgff* ^l'^- ^^'. 
situated in a central reserve city may make loans secured p 'stat. l.', 
by improved and unencumbered farm land situated with- Act Sept. 7. 
in its Federal reserve district or within a radius of one 1,^,^754^^ ^^^' 
hundred miles of the place in which such bank is located, 
irrespective of district lines, and may also make loans se- 
cured by improved and unencumbered real estate located 

within one hundred miles of the place in which such 
bank is located, irrespective of district lines ; but no loan 
made upon the security of such farm land shall be made 
for a longer time than five years, and no loan made upon 
the security of such real estate as distinguished from 
farm land shall be made for a longer time than one year 
nor shall the amount of any such loan, whether upon such 
farm land or upon such real estate, exceed fifty per 
centum of the actual value of the property offered as se- 
curity. Any such bank may make such loans, whether 
secured by such farm land or such real estate, in an ag- 
gregate sum equal to twenty-five per centum of its capital 
and surplus or to one-third of its time deposits and such 
banks may continue hereafter as heretofore to receive 
time deposits and to pay interest on the same. 

The Federal Reserve Board shall have power from 
time to time to add to the list of cities in which national 
banks shall not be permitted to make loans secured upon 
real estate in the manner described in this section. 

FOREIGN BRANCHES. 

625. Sec. 25 [as amended 1919]. — Any national banking Act Dec. 23, 
association possessing a capital and surplus of $1,000,000 ss st^at*!" "l.! 
or more may file application with the Federal Reserve ^^^• 
Board for permission to exercise, upon such conditions ^ct. Sept. 7, 
and under such regulations as may be prescribed by the Jf ^SwJ^^ ^***' 
said board, either or both of the following powers : 

First. To establish branches in foreign countries or Act Sept. 17. 
dependencies or insular possessions of the United States ^^^^" 
for the furtherance of the foreign commerce of the 
United States, and to act if required to do so as fiscal 
agents of the United States. 

Second. To invest an amount not exceeding in the 
aggi"egate ten per centum of its paid-in capital stock and 



166 THE FEDERAL RESERVE ACT. 

surplus in the stock of one or more banks or corporations 
chartered or incorporated under the laws of the United 
States or of any State thereof, and principally engaged in 
international or foreign banking, or banking in a depend- 
ency or insular possession of the United States either 
directly or through the agency, ownership, or control of 
local institutions in foreign countries, or in such depend- 
encies or insular possessions. Until January 1, 1921, any 
national banking association, without regard to the 
amount of its capital and surplus, may file application 
with the Federal Reserve Board for permission, upon 
such conditions and under such regulations as may be pre- 
scribed by said board, to invest an amount not exceeding 
in the aggregate 5 per centum of its paid-in capital and 
surplus in the stock of one or more corporations chartered 
or incorporated under the laws of the United States or of 
any State thereof and, regardless of its location, princi- 
pally engaged in such phases of international or foreign 
financial operations as may be necessary to facilitate the 
export of goods, wares, or merchandise from the United 
States or any of its dependencies or insular possessions 
to any foreign country: Provided^ however^ That in no 
event shall the total investments authorized by this 
section by any one national bank exceed 10 per centum 
of its capital and surplus. 

Such application shall specify the name and capital of 
the bankmg association filing it, the powers applied for, 
and the place or places where the banking or financial 
operations proposed are to be carried on. The Federal 
Reserve Board shall have power to approve or to reject 
such application in whole or in part if for any reason the 
granting of such application is deemed inexpedient, and 
shall also have power from time to time to increase or 
decrease the number of places where such banking opera- 
tions may be carried on. 

Every national banking association operating foreign 
branches shall be required to furnish information con- 
cerning the condition of such branches to the Comp- 
troller of the Currency upon demand, and every member 
bank investing in the capital stock of banks or corpora- 
tions described above shall be required to furnish infor- 
mation concerning the condition of such banks or cor- 
porations to the Federal Reserve Board upon demand, 
and the Federal Reserve Board may order special exami- 
nations of the said branches, banks, or corporations at 
such time or times as it may deem best. 

Before any national bank shall be permitted to pur- 
chase stock in any such corporation the said corporation 
shall enter into an agreement or undertaking with the 
Federal Reserve Board to restrict its operations or con- 
duct its business in such manner or under such limita- 
tions and restrictions as the said board may prescribe for 
the place or places wherein such business is to be con- 
ducted. If at any time the Federal Reserve Board shall 



THE FEDERAL RESERVE ACT. 167 

ascertain that the regulations prescribed by it are not 
being complied with, said board is hereby authorized and 
empowered to institute an investigation of the matter and 
to send for persons and papers, subpoena witnesses, and 
administer oaths in order to satisfy itself as to the actual 
nature of the transactions referred to. Should such in- 
vestigation result in establishing the failure of the cor- 
poration in question, or of the national bank or banks 
which may be stockholders therein, to comply with the 
regulations laid down by the said Federal Reserve Board, 
such national banks may be required to dispose of stock 
holdings in the said corporation upon reasonable notice. 

Every such national banking association shall conduct 
the accounts of each foreign branch independently of the 
accounts of other foreign branches established by it and 
of its home office, and shall at the end of each fiscal period 
transfer to its general ledger the profit or loss accrued 
at each branch as a separate item. 

Any director or other officer, agent, or employee of any 
member bank may, with the approval of the Federal 
Reserve Board, be a director or other officer, agent, or 
employee of any such bank or corporation above men- 
tioned in the capital stock of which such member bank 
shall have invested as hereinbefore provided, without 
being subject to the provisions of section eight of the 
Act approved October fifteenth, nineteen hundred and 
fourteen, entitled "An Act to supplement existing laws 
against unlawful restraints and monopolies, and for 
other purposes." 

BANKING CORPORATIONS AUTHORIZED TO DO FOREIGN 
BANKING BUSINESS. 

625a. Sec. 25 (a). — Corporations to be organized for the ^^g^ct Dec. 24. 
purpose of engaging in international or foreign banking 
or other international or foreign financial operations, or 
in banking or other financial operations in a dependency 
or insular possession of the United States, either di- 
rectly or through the agency, ownership, or control of 
local institutions in foreign countries, or in such de- 
pendencies or insular possessions as provided by this sec- 
tion, and to act Avhen required by the Secretary of the 
Treasury as fiscal agents of the United States, laay be 
formed by anj^ number of natural persons, not less in 
any case than five. 

Such persons shall enter into articles of association 
which shall specify in general terms the objects for 
which the association is formed and may contain any 
other provisions not inconsistent with law which the 
association may see fit to adopt for the regulation of its 
business and the conduct of its affairs. 

Such articles of association shall be signed by all of 
the persons intending to participate in the organization 
of the corporation and, thereafter, shall be forwarded to 
the Federal Reserve Board and shall be filed and pre- 
served in its office. The persons signing the said articles 



168 THE FEDERAL RESERVE ACT. 

of association shall, under their hands, make an organi- 
zation certificate which shall specifically state: 

First. The name assumed by such corporation, which 
shall be subject to the approval of the Federal Reserve 
Board. 

Second. The place or places where its operations are 
to be carried on. 

Third. The place in the United States where its home 
office is to be located. 

Fourth. The amount of its capital stock and the num- 
ber of shares into which the same shall be divided. 

Fifth. The names and places of business or residence of 
the persons executing the certificate and the number of 
shares to which each has subscribed. 

Sixth. The fact that the certificate is made to enable 
the persons subscribing tlie same, and all other persons, 
firms, companies, and corporations, who or which may 
thereafter subscribe to or purchase shares of the capital 
stock of such corporation, to avail themselves of the ad- 
vantages of this section. 

The persons signing the organization certificate shall 
duly acknowledge the execution thereof before a judge 
of some court of record or notary public, who shall 
certify thereto under the seal of such court or notary, 
and thereafter the certificate shall be forwarded to the 
Federal Reserve Board to be filed and preserved in its 
office. Upon duly making and filing articles of asso- 
ciation and an organization certificate, and after the 
Federal Reserve Board has approved the same and issued 
a permit to begin business, the association shall become 
and be a body corporate, and as such and in the name 
designated therein shall have power to adopt and use a 
corporate seal, which may be changed at the pleasure 
of its board of directors; to have succession for a period 
of twenty years unless sooner dissolved by the act of the 
shareholders owning two-thirds of the stock or by an 
act of Congi'ess or unless its franchises become forfeited 
by some violation of law; to make contracts; to sue and 
be sued, complain, and defend in any court of law or 
equity ; to elect or appoint directors, all of whom shall be 
citizens of the United States ; and, by its board of direc- 
tors, to appoint such officers and employees as may be 
deemed proper, define their authority and duties, require 
bonds of them, and fix the penaltj' thereof, dismiss such 
officers or employees, or any thereof, at pleasure and ap- 
point others to fill their places ; to prescribe, by its board 
of directors, by-laws not inconsistent with law or with 
the regulations of the Federal Reserve Board regulating 
the manner in which its stock shall be transferred, its 
directors elected or appointed, its officers and employees 
appointed, its property transferred, and the privileges 
gi-anted to it by law exercised and enjoyed. 

Each corporation so organized shall have power, under 
such rules and regulations as the Federal Reserve Board 
may prescribe: 



THE FEDERAL, RESERVE ACT. 169 

(a) To purchase, sell, discount, and negotiate, with or 
without its indorsement or guaranty, notes, drafts, 
checks, bills of exchange, acceptances, including bank- 
ers' acceptances, cable transfers, and othei* evidences of 
indebtedness; to purchase and sell, with or without its 
indorsement or guaranty, securities, including the obli- 
gations of the United States or of any State thereof but 
not including shares of stock in any corporation except 
as herein provided ; to accept bills or drafts drawn upon 
it subject to such limitations and restrictions as the Fed- 
eral Reserve Board may impose; to issue letters of 
credit; to purchase and sell coin, bullion, and exchange; 
to borrow and to lend money ; to issue debentures, bonds, 
and promissory notes under such general conditions as to 
security and such limitations as the Federal Reserve 
Board ma}^ prescribe, but in no event having liabilities 
outstanding thereon at any one time exceeding ten times 
its capital stock and surplus; to receive deposits outside 
of the United States and to receive only such deposits 
within the United States as may be incidental to or for 
the purpose of carrying out transactions in foreign coun- 
tries or dependencies or insular possessions of the United 
States; and generally to exercise such powers as are in- 
cidental to the poAvers conferred by this act or as may 
be usual, in the determination of the Federal Reserve 
Board, in connection with the transaction of the business 
of banking or other financial operations in the countries, 
colonies, dependencies, or possessions in which it shall 
transact business and not inconsistent with the powers 
specifically granted herein. Nothing contained in this 
section shall be construed to prohibit the Federal Reserve 
Board, under its power to prescribe rules and regula- 
tions, from limiting the aggregate amount of liabilities 
of any or all classes incurred by the corporation and 
outstanding at any one time. Whenever a corporation 
organized under this section receives deposits in the 
United States authorized by this section it shall carry 
reserves in such amounts as the Federal Reserve Board 
mav prescribe, but in no event less than 10 per centum 
of its deposits. 

(b) To establish and maintain for the transaction of 
its business branches or agencies in foreign countries, 
their dependencies or colonies, and in the dependencies 
or insular possessions of the United States, at such places 
as may be approved by the Federal Reserve Board and 
under such rules and regulations as it may prescribe, in- 
cluding countries or dependencies not specified in the 
orimnal organization certificate. 

(c) With the consent of the Federal Reserve Board to 
purcliase and hold stock or other certificates of owner- 
ship in any other corporation organized under the pro- 
visions of this section, or under the laws of any foreign 
country or a colony or dependency thereof, or under the 
laws of any State, dependency, or insular possession of 
the United States but not engaged in the general bushiess 



170 THE FEDERAL RESERVE ACT. 

of buying or selling goods, wares, merchandise or com- 
modities in the United States, and not transacting any 
business in the United States except such as in the judg- 
ment of the Federal Reserve Board mav be incidental to 
its international or foreign business : Provided^ however^ 
That, except with the approval of the Federal Reserve 
Board, no corporation organized hei"eimder shall invest 
in any one corporation an amount in excess of 10 per 
centum of its own capital and surplus, except in a cor- 
poration engaged in the business of bankmg, when 15 
per centum of its capital and surplus may be so invested : 
Pro'vided further^ That no corporation organized here- 
under shall purchase, own, or hold stock or certificates 
of ownership in any other corporation organized here- 
under or under the laws of an}'^ State which is in sub- 
stantial competition therewith, or which holds stock or 
certificates of ownership in corporations which are in 
substantial competition with the purchasing corporation. 

Nothing contained herein shall prevent corporations 
organized hereunder from purchasing and holding stock 
in any corporation where such purchase shall be neces- 
sary to prevent a loss upon a debt previously contracted 
in good faith; and stock so purchased or acquired in 
corporations organized under this section shall within 
six months from such purchase be sold or disposed of at 
public or private sale unless the time to so dispose of 
same is extended by the Federal Reserve Board. 

No corporation organized under this section shall carry 
on any part of its business in the United States except 
such as, in the judgment of the Federal Reserve Board, 
shall be incidental to its international or foreign busi- 
ness : And provided further^ That except such as is inci- 
dental and preliminary to its organization no such cor- 
poration shall exercise any of the powers conferred by 
this section until it has been duly authorized by the 
Federal Reserve Board to commence business as a cor- 
poration organized under the provisions of this section. 

No corporation organized under this section shall 
engage in commerce or trade in commodities except as 
specifically provided in this section, nor shall it either 
directly or indirectly control or fix or attempt to control 
or fix the price of any such commodities. The charter of 
any corporation violating this provision shall be sub- 
ject to forfeiture in the manner hereinafter provided 
in this section. It shall be unlawful for any director, 
officer, agent, or employee of any such corporation to use 
or to conspire to use the credit, the funds, or the power of 
the corporation to fix or control the price of any such 
commodities, and any such person violating this provi- 
sion shall be liable to a fine of not less than $1,000 and 
not exceeding $5,000 or imprisonment not less than one 
year and not exceeding five years, or both, in the discre- 
tion of the court. 

No corporation shall be organized under the provisions 
of this section with a capital stock of less than $2,000,000. 



THE FEDERAL RESERVE ACT. 171 

one-quarter of which must be paid in before the corpora- 
tion may be authorized to begin business, and the re- 
mainder of the capital stock of such corporation shall 
be paid in installments of at least 10 per centum on the 
whole amount to which the corporation shall be limited 
as frequently as one installment at the end of each suc- 
ceeding two months from the time of the commencement 
of its business operations until the whole of the capital 
stock shall be paid in. The capital stock of any such 
corporation may be increased at any time, with the ap- 
proval of the Federal Reserve Board, by a vote of two- 
thirds of its shareholders or b}^ unanimous consent in 
writing of the shareholders without a meeting and with- 
out a formal vote, but any such increase of capital shall 
be fully paid in within ninety days after such approval ; 
and may be reduced in like manner, provided that in no 
event shall it be less than $2,000,000. No corporation, 
except as herein provided, shall during the time it shall 
continue its operations withdraw or permit to be with- 
drawn, either in the form of dividends or otherwise, 
any portion of its capital. Any national banking asso- 
ciation may invest in the stocK of any corporation or- 
ganized under the provisions of this section, but the ag- 
gi'egate amount of stock held in all corporations engaged 
in business of the kind described in this section and in 
section 25 of the Federal Reserve Act as amended shall 
not exceed 10 per centum of the subscribing bank's capi- 
tal and surplus. 

A majority of the shares of the capital stock of any 
such corporation shall at all times be held and owned by 
citizens of the United States, by corporations the con- 
trolling interest in which is owned by citizens of the 
United States, chartered under the laws of the United 
States or of a State of the United States, or by firms or 
companies, the controlling interest in which is owned by 
citizens of the United States. The provisions of section 
8 of the act approved October 15, 1914, entitled 'An act 
to supplement existing laws against unlawful restraints 
and monopolies, and for other purposes,' as amended by 
the acts of May 15, 1916, and September T, 1916, shall be 
construed to apply to the directors, other officers, agents, 
or employees of corporations organized under the pro- 
visions of this section: Provided^ however^ That nothing 
herein contained shall (1) prohibit any director or other 
officer, ageiit or employee of any member bank, who has 
procured the approval of the Federal Reserve Board 
from serving at the same time as a director or other offi- 
cer, agent or employee of any corporation organized 
under the provisions of this section in whose capital 
stock such member bank shall have invested: or (2) pro- 
hibit any director or other officer, agent, or employee of 
any corporation organized under the provisions of this 
section, who has procured the approval of the Federal 
Reserve Board, fi'om serving at the same time as a direc- 
tor or other officer, agent or employee of any other cor- 



172 THE FEDERAL RESERVE ACT. 

poration in whose capital stock such first-mentioned cor- 
poration shall have invested under the provisions of this 
section. 

Xo member of the Federal Reserve Board shall be an 
officer or director of any corporation organized under 
the provisions of this section, or of any corporation en- 
gaged in similar business organized under the laws of 
any State, nor hold stock in any such corporation, and 
before entering upon his duties as a member of the Fed- 
eral Reserve Board he shall certify under oath to the 
Secretary of the Treasury that he has complied with 
this requirement. 

Shareholders in any corporation organized under the 
provisions of this section shall be liable for the amount 
of their unpaid stock subscriptions. Xo such corporation 
shall become a member of any Federal reserve bank. 

Should any corporation organized hereunder violate or 
fail to comply with any of the provisions of this section, 
all of its rights, privileges, and franchises derived here- 
from may thereby be forfeited. Before any such cor- 
poration shall be declared dissolved, or its rights, privi- 
leges, and franchises forfeited, any noncompliance with, 
or violation of such laws shall, however, be determined 
and adjudged by a court of the United States of com- 
petent jurisdiction, in a suit brought for that purpose in 
the district or territory in which the home office of such 
corporation is located, which suit shall be brought by the 
United States at the instance of the Federal Reserve 
Board or the Attorney General. Upon adjudication of 
such noncompliance or violation, each director and offi- 
cer who participated in, or assented to, the illegal act or 
acts, shall be liable in his personal or individual capacity 
for all damages which the said corporation shall have 
sustained in consequence thereof. Xo dissolution shall 
take away or impair any remedy against the corporation, 
its stockholders, or officers for any liability or penalty 
previously incurred. 

Any such corporation may go into voluntary liquida- 
tion and be closed by a vote of its shareholders owning 
two-thirds of its stock. 

Whenever the Federal Reserve Board shall become 
satisfied of the insolvency of any such corporation, it 
may appoint a receiver who shall take possession of all 
of the property and assets of the corporation and exer- 
cise the same rights, privileges, powers, and authority 
with respect thereto as are now exercised by receivers of 
national banks appointed by the Comptroller of the 
Currency of the United States: Provided^ however^ That 
the assets of the corporation subject to the laws of other 
countries or jurisdictions shall be dealt with in accord- 
ance with the terms of such laws. 

Evei'y corporation organized under the provisions of 
this section shall hold a meeting of its stockholders an- 
nually upon a date fixed in its by-laws, such meeting to 
be held at its home office in the United States. Every 



THE FEDERAL RESERVE ACT. 173 

such corporation shall keep at its home office books con- 
taining the names of all stockholders thereof, and the 
names and addresses of the members of its board of di- 
rectors, together with copies of all reports made by it to 
the Federal Reserve Board. Every such corporation 
shall make reports to the Federal Reserve Board at such 
times and in such form as it may require; and shall be 
subject to examination once a year and at such other 
times as may be deemed necessary by the Federal Reserve 
Board by examiners appointed by the Federal Reserve 
Board, the cost of such examinations, including the com- 
pensation of the examiners, to be fixed by the Federal 
Reserve Board and to be paid by the corporation 
examined. 

The directors of any corporation organized under the 
provisions of this section may, semiannually, declare a 
dividend of so much of the net profits of the corporation 
as they shall judge expedient; but each corporation shall, 
before the declaration of a dividend, carry one-tenth of 
its net profits of the preceding half year to its surplus 
fund until the same shall amount to 20 per centum of its 
capital stock. 

Any corporation organized under the provisions of this 
section shall be subject to tax by the State within which 
its home office is located in the same manner and to the 
same extent as other corporations organized under the 
laws of that State which are transacting a similar char- 
acter of business. The shares of stock in such corpora- 
tion shall also be subject to tax as the personal property 
of the owners or holders thereof in the same manner and 
to the same extent as the shares of stock in similar State 
corporations. 

Any corporation organized under the provisions of 
this section may at any time within the two years next 
previous to the date of the expiration of its corporate 
existence, by a vote of the shareholders owning two- 
thirds of its stock, apply to the Federal Reserve Board 
for its approval to extend the period of its corporate 
existence for a term of not more than twenty years, and 
upon certified approval of the Federal Reserve Board 
such corporation shall have its corporate existence for 
such extended period unless sooner dissolved by the act 
of the shareholders owning two-thirds of its stock, or by 
an Act of Congress or unless its franchise becomes for- 
feited by some violation of law. 

Any bank or banking institution, principally engaged 
in foreign business, incorporated by special law of any 
State or of the United States or organized under the 
general laws of any State or of the United States and 
having an unimpaired capital sufficient to entitle it to 
become a corporation under the provisions of this sec- 
tion may, by the vote of the shareholders owning not less 
than two-thirds of the capital stock of such bank or 
banking association, with the approval of the Federal 
Reserve Board, be converted into a Federal corporation 



174 THE FEDERAL RESERVE ACT. 

of the kind authorized by this section with any name 
approved by the Federal Resei've Board : Provided^ how- 
ever^ That said conversion shall not be in contravention 
of the State law. In such case the articles of association 
and organization certificate may be executed by a ma- 
jority of the directors of the bank or banking institution, 
and the certificate shall declare that the owners of at 
least two-thirds of the capital stock have authorized the 
directors to make such certificate and to change or con- 
vert the bank or banking institution into a Federal cor- 
poration. A majority of the directors, after executing 
the articles of association and the organization certifi- 
cate, shall have power to execute all other papers and to 
do whatever may be required to make its organization 
perfect and complete as a Federal corporation. The 
shares of any such corporation may continue to be for 
the same amount each as they were before the conver- 
sion, and the directors may continue to be directors of 
the corporation until others are elected or appointed in 
accordance with the provisions of this section. When 
the Federal Reserve Board has given to such corpora- 
tion a certificate that the provisions of this section have 
been complied with, such corporation and all its stock- 
holders, officers, and employees, shall have the same pow- 
ers and privileges, and shall be subject to the same duties, 
liabilities, and regulations, in all respects, as shall have 
been prescribed by this section for corporations origi- 
nally organized hereunder. 

Every officer, director, clerk, employee, or agent of any 
corporation organized under this section who embezzles, 
abstracts, or willfully misapplies any of the moneys, 
funds, credits, securities, evidences of indebtedness or 
assets of any character of such corporation; or who, 
without authority from the directors, issues or puts forth 
any certificate of deposit, draws any order or bill of 
exchange, makes any acceptance, assigns any note, bond, 
debenture, draft, bill of exchange, mortgage, judgment, 
or decree ; or who makes any false entry in any book, re- 
port, or statement of such corporation with intent, in 
either case, to injure or defraud such corporation or any 
other company, body politic or corporate, or any indi- 
vidual person, or to deceive any officer of such corpora- 
tion, the Federal Reserve Board, or any agent or ex- 
aminer appointed to examine the affairs of any such 
corporation; and every receiver of any such corporation 
and every clerk or employee of such receiver who shall 
embezzle, abstract, or willfully misapply or wrongfully 
convert to his own use any moneys, funds, credits, or 
assets of any character which may come into his posses- 
sion or under his control in the execution of his trust or 
the performance of the duties of his employment; and 
every such receiver or clerk or employee of such receiver 
who shall, with intent to injure or defraud any person, 
body politic or corporate, or to deceive or mislead the 
, Federal Reserve Board, or any agent or examiner ap- 



THE FEDERAL RESERVE ACT. 175 

pointed to examine the affairs of such receiver, shall 
make any false entry in any book, report, or record of 
any mati:er connected with the duties of such receiver; 
and every person who with like intent aids or abets any 
officer, director, clerk, employee, or agent of any corpora- 
tion organized under this section, or receiver or clerk or 
employee of such receiver as aforesaid in any violation 
of this section, shall upon conviction thereof be impris- 
oned for not less than two years nor more than ten years, 
and may also be fined not more than $5,000, in the dis- 
cretion of the court. 

Whoever being connected in any capacity with any 
corporation organized under this section represents in 
any way that the United States is liable for the payment 
of any bond or other obligation, or the interest thereon, 
issued or incurred by any corporation organized here- 
under, or that the United States incurs any liability in 
respect of any act or omission of the corporation, shall 
be punished by a fine of not more than $10,000 and by im- 
prisonment for not more than five years. 

REPEAL OF PROVISIONS OF LAW INCONSISTENT WITH 
THE PROVISIONS OF THE FEDERAL RESERVE ACT. 

626. Sec. 26. — All provisions of law inconsistent with Act Dec. 2S, 
or superseded by any of the provisions of this Act are to 38 'stat ^u, 
that extent and to that extent only hereby repealed : ^'^^* 
Provided, Nothing in this Act contained shall be con- 
strued to repeal the parity provision or provisions con- 
tained in an Act approved March fourteenth, nineteen 
hundred, entitled "An Act to define and fix the standard 

of value, to maintain the parity of all forms of money 
issued or coined by the United States, to refund the public 
debt, and for other purposes," and the Secretary of the 
Treasury may, for the purpose of maintaining such parity 
and to strengthen the gold reserve, borrow gold on the 
security of United States bonds authorized by section two 
of the Act last referred to or for one-year gold notes 
bearing interest at a rate of not to exceed three per 
centum per annum, or sell the same if necessary to obtain 

fold. When the funds of the Treasury on hand justify, 
e may purchase and retire such outstanding bonds and 
notes. 

ACT OF MAY 30, 1908, EXTENDED TO JUNE 30, 1915. 
REENACTMENT OF CERTAIN SECTIONS OF REVISED 
STATUTES. 

627. Sec. 27.— The provisions of the Act of May thir- ^^Act Dec. |^3. 
tieth, nineteen hundred and eight, authorizing national 88 'stat.' l.', 
currency associations, the issue of additional national- ^^ict auk. 4, 
bank circulation, and creating a National Monetary Com- jf^l^g^^ 
mission, which expires by limitation under the terms of ' 

such Act on the thirtieth day of June, nineteen hundred 
and fourteen, are hereby extended to June thirtieth, nine- 
teen hundred and fifteen, and sections fifty-one hundred 



176 THE FEDERAL RESERVE ACT. 

and fifty-three, fifty-one hundred and seventy-two, fifty- 
one hundred and ninety-one, and fifty-two hundred and 
fourteen of the Eevised Statutes of the United States, 
which were amended by the Act of May thirtieth, nine- 
teen hundred and eight, are hereby reenacted to read as 
such sections read prior to May thirtieth, nineteen hun- 
dred and eight, subject to such amendments or modifica- 
tions as are prescribed in this Act : 

KATE OF TAXATION ON CIRCULATING NOTES SECURED 
OTHERWISE THAN BY BONDS OF THE UNITED STATES. 
WHEN SECRETARY OF TREASURY AUTHORIZED TO 
SUSPEND LIMITATIONS OF ACT OF MAY SO, 1908. 

1913* £c?' 2i\ 627a. Provided, hoivever. That section nine of the Act 
38 Stat.' L.' first referred to in this section is hereby amended so as to 
Act Aug. 4, change the tax rates fixed in said Act by making the por- 
if ^e^sf ^ ^*^^' tio^ applicable thereto read as follows : 

National banking associations having circulating notes 
secured otherwise than by bonds of the United states, 
shall pay for the first three months a tax at the rate oi 
three per centum per annum upon the average amount 
of such of their notes in circulation as are based upon 
the deposit of such securities, and afterwards an addi- 
tional tax rate of one-half of one per centum per annum 
for each month until a tax of six per centum per annum 
is reached, and thereafter such tax of six per centum 
per annum upon the average amount of such notes : Pro- 
vided further, That whenever in his judgment he iflay 
deem it desirable, the Secretary of the Treasury shall 
have power to suspend the limitations imposed by sec- 
tion one and section three of the Act referred to in this 
section, which prescribe that such additional circulation 
secured otherwise than^by bonds of the United States 
shall be issued only to National banks having circulating 
notes outstanding secured by the deposit of bonds of the 
United States to an amount not less than forty per 
centum of the capital stock of such banks, and to suspend 
also the conditions and limitations of section five of said 
Act except that no bank shall be permitted to issue circu- 
lating notes in excess of one hundred and twenty-five per 
centum of its unimpaired capital and surplus. He shall 
require each bank and currency association to maintain 
on deposit in the Treasury of the United States a sum in 
gold sufficient in his judgment for the redemption of such 
notes, but in no event less than five per centum. He may 
permit National banks, during the period for which 
such provisions are suspended, to issue additional circula- 
tion under the terms and conditions of the Act referred 
to as herein amended : Provided further, That the Secre- 
tary of the Treasury, in his discretion, is further author- 
ized to extend the benefits of this Act to all (jualified 
State Imnks and trust companies, which have joined the 
Federal reserve system, or which may contract to join 
within fifteen days after the passage of this Act, 



THE FEDERAL RESERVE ACT. 177 

REDUCTION OF CAPITAL OF NATIONAL BANKS. 

628. Sec. 28.— Section fifty-one hundred and forty-three j^.f g^^*- ^i: 
of the Revised Statutes is hereby amended and reenacted 38 sut." u', 
to read as follows: Anj' association formed under this 

title may, by the vote of shareholders owning two-thirds 
of its capital stock, reduce its capital to any sum not be- 
low the amount required by this title to authorize the 
formation of associations ; but no such reduction shall be 
allowable which will reduce the capital of the association 
below the amount required for its outstanding circula- 
tion, nor shall any reduction be made until the amount 
of the proposed reduction has been reported to the Comp- 
troller of the Currency and such reduction has been ap- 
proved by the said Comptroller of the Currenc}' and by 
the Federal Reserve Board, or by the organization com- 
mittee pending the organization of the Federal Reserve 
Board. 

INYALIDATION OF CLAUSE, ETC., IN ACT NOT TO INVALL 
DATE REMAINDER OF ACT. 

629. Sec. 29. — If anv clause, sentence, paragraph, or Act Dec. 23, 
part of this Act shall for any reason be adjudged by any 38 'stat.* \.', 
court of competent jurisdiction to be invalid, such judg-^^^* 

ment shall not affect, impair, or invalidate the remainder 
of this Act, but shall be confined in its operation to the 
clause, sentence, paragraph, or part thereof directly in- 
volved in the controversy in which such judgment shall 
have been rendered. 

RESERTATION OF RIGHT TO AMEND OR REPEAL. 

Act Dec. 23, 

630. Sec. 30. — The right to amend, alter, or repeal this g^f i^, sec 30 : 
Act is hereby expressly reserved. 276. 

164312°— 20 12 



178 



THE FEDERAL RESERVE ACT. 



ACTS OF GENERAL NATURE. 



179 



CHAPTER \^I. 



ACTS OF A GENERAL NATURE AND SECTIONS OF THE REVISED STATUTES, 
NOT INCLUDED IN THE NATIONAL BANK ACT, AFFECTING NATIONAL 
BANKS. 



700. 



District attorney to conduct suits 
when United States is a party. 

Jurisdiction of district court to en- 
join Comptroller. 

Where such proceedings must be 
brought. 

Sealed certificates of Comptroller 
competent evidence. 

Certified copy of organization cer- 
tificate as evidence. 
705-715. Tax on State bank circulation. 
716-717. Tax on United States and na- 
tional bank notes. 



701. 
702. 
703. 
704. 



718. Restrictions on notes less than one 
dollar. 

719-729. Legal tender. 

730-738. Government depositaries. 

739-748. Offenses against the currency. 

749-762. Currency act March 14, 1900. 

763-766. Act March 4, 1907. 

767-768. Panama Canal bonds. 

769-770. Certified checks when receiva- 
ble for duties and taxes. 

771. Subscriptions to Red Cross. 



ALL SUITS UNDER BANKING LAW IN WHICH THE UNITED 
STATES OR ANY OF ITS OFFICERS OR AGENTS ARE 
PARTIES TO BE CONDUCTED BY DISTRICT ATTOR- 
NEYS UDER THE SUPERVISION OF THE SOLICITOR 
OF THE TREASURY. 



Act Feb. 25, 



700. Sec. 380. — All suits and proceedings arising out ,„., „ ,„ _„ „. 

.. ,, .^ . iTi- l»o3, c. 58, sec.55; 

of the provisions of law governing national banking asso- i2stat. l.,68o. 
ciations, in which the United States or any of its officers isoi^'c.ioe^s^eVsei 
or agents shall be parties, shall be conducted by the dis- ^^ ^^^^- ^•' ^^°- 
trict attorneys of the several districts under the direction 
and supervision of the Solicitor of the Treasury. 

Note. — The United States Supreme Court decided in the case of 
Gibson v. Peters (150 U. S., 342) that a district attorney could not 
receive any compensation for services in conducting a suit arising 
out of the provisions of the national banking laws in which the United 
States or any of its officers or agents are parties. 

JURISDICTION OF DISTRICT COURT TO ENJOIN COMP- 
TROLLER. 



701. Sec. 24 
j urisdiction as follows 



The district court shall have original jg^^['^|^-3^||'[|^ 

1092. ' 
* * * 



Sixteenth, Of aU cases commenced by the United 
States, or by direction of any officer thereof, against any 
national banking association, and cases for winding up 
the affairs of any sach bank; and of all suits brought by 
any banking association established in the district for 
which the court is held, imder the provisions of title 
"National Banks," Revised Statutes, to enjoin the 
Comptroller of the Currency, or an}- receiver acting under 
his direction, as provided ])y said title. And ail national 
banking associations established under the hiws of the 
United States shall, for tlie purposes of all other actions 
by or against them, real, personal, or mixed, and all suits 



181 



282 ACTS OF GENERAL NATURE. 

in equity, be deemed citizens of the States in which they 
are respectively located. 

Note. — Proceedings to enjoin Comptroller are those authorized by 
Bectlon 5237, United States Revised Statutes. Until the passage of the 
act of March 3, 1911, the circuit courts had this jurisdiction under sec- 
tion 629, United States Revised Statutes. 

WHERE SUCH PROCEEDINGS MUST BE BROUGHT. 

.o-f* ?;^® ^' 702. Sec. 736. — All proceedinj^s by any national bank- 

1864, c. 106, sees. . . . ^ • .1 F( . 11 t ±-u rx. 

60. 57; 13 Stat. L., mg association to enjoin the Comptroller oi tne (Jur- 
115, 116. rency, under the provisions of any law relating to national 

banking associations, shall be had in the district where 

such association is located. 

SEALED CERTIFICATES OF COMPTROLLER COMPETENT 
EVIDENCE. 

1864*^0 io6°sec 2 '^^^' ^^^' ^^^' — ^Ivcry Certificate, assignment, and con- 
lastat. L.!ioo; ' veyance executed by the Comptroller of the Currency, in 
pursuance of law, and sealed with his seal of office, shall 
be received in evidence in all places and courts; and all 
copies of papers in his office, certified by him and authen- 
ticated by the said seal, shall in all cases be evidence 
equally with the originals. An impression of such seal 
directly on the paper shall be as valid as if made on wax 
or wafer. 

CERTIFIED COPT OF ORGANIZATION CERTIFICATE AS 
EVIDENCE. 

isef c loe^sec e- '^^^' ^^^' ^^^' — Copies of the organization certificate of 
13 Stat. L.,' 101.' ' any national banking association, duly certified by the 
Comptroller of the Currency, and authenticated by his 
seal of office, shall be evidence in all courts and places 
within the jurisdiction of the United States of the exist- 
ence of the association, and of every matter which could 
be proved by the production of the original certificate. 

TAX ON STATE BANK CIRCULATION. 
TAX ON CIRCULATION. 
705. Sec. 3408.— 

Note. — The tax on circulation waa originally provided for in the act 
of June 30, 1864. The taxation provisions were amended by section 6 
of the act of March 3, 1865, by section 9 of the act of July 13, 1866, and 
by the act of June 6, 1872, section 37. The provisions as thus amended 
were incorporated in the Revised Statutes as section 3408. This sec- 
tion included three subsections, the first imposing a tax on deposits, 
the second on capital, and the third on circulation of banking institu- 
tions. The first and second subsections of this section were repealed 
by the act of March 3, 1883, and the third subsection was superseded by 
the act of February 8, 1875. 



CIRCULATION— WHEN EXEMPTED FROM TAX. 

Act Mar.3 1865 706. Sbc. 3411. — Whenever the Outstanding circulation 

c. 78, sec. 14; 13 , , . . . ^ . ° 

Stat. L. 486. of any bank, association, corporation, company, or person 

i866^c. 184! sec.^gj is rcduccd to an amount not exceeding five per centum of 

14 sUi. L.', 146. ^}^Q chartered or declared capital existing at the time the 

same was issued, said circulation shall be free from taxa- 



ACTS OF GENERAL NATURE. 183 

tion; and whenever any bank which has ceased to issue 
notes for circulation deposits in the Treasury of the United 
States, in lawful money, the amount of its outstanding 
circulation, to be redeemed at par, under such regulations 
as the Secretary of the Treasury shall prescribe, it shall 
be exempt from any tax upon such circulation. 

707. Sees. 3412, 3413.— 

Superseded by act February 8, 1875. 

TAX ON CIRCULATION— ACT FEBRUARY 8, 1875. 

708. Sec. 19.-— That every person, firm, association ^ ^^^'^^-^j-g^^^ 
other than national bank associations, and everv corpora- stat.'i.., 3ii. ' 
tion, State bank, or State banking association, sliall pay a 

tax of ten per centum on the amount of their own notes 
ilsed for circulation and paid out by them. 

TAX ON NOTES OF STATE BANKS, MUNICIPAL CORPO- 
RATIONS, ETC., USED AS CIRCULATION AND PAID 
OUT BY BANKS. ACT FEBRUARY 8, 1875. 

709. Sec. 20.— That every such person, firm, associa-^. "|^*^*^|J5f| 
tion, corporation, wState bank, or State banking associa- stat.'L., sii. ' 
tion, and also every national banking association, shall 

pay a Hke tax of ten per centum on the amount of notes 
of any person, firm, association other than a national 
banking association, or of any corporation, State bank, or 
State banking association, or of any town, city, or munici- 
pal corporation, used for circulation and paid out by them. 

BANKS' RETURNS; PAYMENT OF TAX PENALTIES. ACT 
FEBRUARY 8, 1875. 

710. Sec. 21.— That the amount of such circulating ^^^^ctFeb^sa^s, 
notes, and of the tax due thereon, shall be returned, and 3u! ' ' ' 
the tax paid at the same time, and in the same manner, 

and with like penalties for failure to return and pay the 
same, as provided by law for the return and payment of 
taxes on deposits, capital, and circulation, imposed by the 
existing provisions of internal-revenue law. 



SEMIANNUAL RETURN BY BANKS. 



30, 
sec. 



711. Sec. 3414. — A true and complete return of the jg^^^c ^rfa* :, 
monthly amount of circulation, [of deposits, and of capi- iin;'i3'stat'. Tj 
taJ], as aforesaid, and of the monthly amount of notes of ^'aci juIv 13, 
persons, town, city, or municipal corporations. State }f|j^j i|*'^j*^- ^' 
banks, or State banking associations paid out as aforesaid Act ' Mar. as, 
for the previous six months, shall be made and rendered in Ifstat.' l.,T* ^' 
duplicate on the first day of December and the first day ^^^2^^, ■'3"?* g^- 
of June, by each of such banks, associations, corporations, 37- '17'stat. l.) 
companies, or persons, with a declaration annexed thereto, ^Act Dec 24, 
under the oath of such person, or of the president or \f^i^{ f' ^ ^'• 
cashier of such bank, association, corporation, or com- 
pany, in such form and manner as may be ]>rescribed by 
the Commissioner of Internal Kevenue, that the same 
contains a true and faithful statement of the amounts 



184 ACTS OF GENERAL NATURE. 

subject to tax, as aforesaid; and one copy shall be trans- 
mitted to the collector of the district in which any such 
bank, association, corporation, or company is situated, or 
in which such person has his place of business, and one 
copy to the Commissioner of Internal Revenue. 

Note. — Italicized words repealed by act March 3, 1883. "That the 
taxes herein specified imposed by the law8 now in force be, and the same 
are hereby, repealed, as hereinafter provided, namely: On capital and 
deposits of banks, bankers, and national banking associations, except 
such taxes as are now due and payable." 

FAILURE TO MAKE RETURN. COMMISSIONER TO ESTI- 
MATE. 

,Jf^„ -^V?,® 3 712. Sec. 3415. — In default of the returns provided in 

1864, C. 173, sec. ^ .. .. e • ^ • r i • 

110; 13 Stat. L., the preceding section, the amount oi circulation, [deposit, 
^^Act July 13, capital], and notes of persons, towns, city, and municipal 
}!®a;„^; ^T^' ^^?" ^' corporations, State banks, and State banking associations 

14 Stat. Jj., 14t). .x; ' • 1 1 11 1 • 1 1 1 /^ 

Act Dec. 21, paid out, as aforesaid, shall be estimated by the Commis- 
ifllat". L.',?o2.^' sioner of Internal Revenue, upon the best information he 
can obtain. And for any refusal or neglect to make 
return and payment, any such bank, association, corpora- 
tion, company, or person so in default shall pay a penalty 
of two hundred dollars, besides the additional penalty and 
forfeitures provided in other cases. 

Note.— See note under preceding section. 

STATE BANKS CONVERTED INTO NATIONAL BANKS; 
RETURNS, HOW MADE. 

c "^s^^lc^'^ilMfa '^^^' ^®^- 3416.— Whenever any State bank or banking 
stat.'L., 486. ' associatiou has been converted into a national banking 
iseefc. 184^860.^9; association, and such national banking association has 
14 Stat. L., 146. assumed the liabilities of such State bank or banking 
association, including the redemption of its bills, by any 
agreement or understanding whatever with the representa- 
tives of such State bank or banking association, such 
national banking association shall be held to make the 
required return and payment on the circulation outstand- 
ing, so long as such circulation shall exceed five per 
centum of the capital before such conversion of such State 
bank or banking association. 

TAX PROVISIONS RESTRICTED. 

m4\.'in sec. '^^^' ^^'^- ^^^'^ [^^ amended 1875].— The provisions of 
110;' 13 Stat. L.' this chapter relating to the tax on the [deposits, capital, 
^Act July 13, and] circulation of banks and to their returns, except as 
l^isi&t^' 146' contained in sections thirty-four hundred and ten, thirty- 
'Act F«b.'' is; four hundred and eleven, thirty-four hundred and twelve, 
L.,ii9. "thirty-four hundred and thirteen, and thirty-four hun- 

dred and sixteen, and such parts of sections thirty-four 
hundred and fourteen and thirty-four hundred and fif- 
teen as relate to the tax of ten per centum on certain notes, 
shall not apply to associations which are taxed under and 
by virtue of Title "jNational Banks." 

Note. — See note under section 3414 stating that taxes on deposits 
and capital were repealed by act March 3, 1883. 



ACTS OF GENERAL NATURE. 185 

TAXES ON INSOLVENT BANKS. ACT MARCH 1, 1879. 

716. Sec. 22.— That whenever and after any bank has ^ A 25^^" '22^215 
ceased to do business by reason of insolvency or bank- s'tat.L.. 351. ' 
ruptcy, no tax shall be assessed or collected, or paid into 
the Treasury of the United States, on account of such 
bank, which shall diminish the assets thereof necessary 
for the fuU payment of all its depositors; and such tax 
shall be abated from such national banks as are found by 
the Comptroller of the Currency to be insolvent; and the 
Commissioner of Internal Revenue, when the facts shall 
so appear to him, is authorized to remit so much of said 
tax against insolvent State and savings banks as shall be 
found to affect the claims of their depositors. 

Note. — Part of section omitted superseded by act of March 3, 1883. 

TAX ON UNITED STATES AND NATIONAL BANK NOTES. 

OBLIGATIONS OF UNITED STATES EXEMPT FROM TAXA- 
TION. 

716. Sec. 3701.— All stocks, bonds. Treasury notes, and jg^^^^ SVE; 
other obligations of the United States, shall be exempt 12 stat. t., m 
from taxation by or under State or municipal or local ^'^^s^^^' 1^2 
authority. f^^S^iKcVv! 

sec. 1; 13 Stat. L., 13. Act June 30, 1864, c. 172, sec. 1; 13 Stat. L., 218. Act Jan. 28, 1865, 
c. 22, sec. 1; 13 Stat. L., 425. Act Mar. 3, 1865, c. 77, sec. 2; 13 Stat. L., 469. Act July 14, 
1870, c. 256, sec. 1; 16 Stat. L., 272. 

NATIONAL-BANK NOTES AND NOTES AND CERTIFICATES 
OF THE UNITED STATES CIRCULATING AS CURRENCY 
SUBJECT TO STATE TAXATION. ACT AUGUST 13, 1894. 

717. Sec. 1. — That circulating notes of national bank- is^'^^s^^^i. ^^ 
ing associations and United States legal-tender notes and stat. l.,z78.' 
other notes and certificates of the United States payable 

on demand and circulating or intended to circulate as 
currency and gold, silver or other coin shaU be subject 
to taxation as money on hand or on deposit under the 
laws of any State or Territory: Provided, That any such 
taxation shall be exercised in the same maimer and at the 
same rate that any such State or Territory shall tax money 
or currency circulating as money within its jurisdiction. 

Sec. 2. That the provisions of this act shall not be ,.-'^/* ,„^"s. is. 
deemed or held to change existing laws in respect of the sut. l., 273. 
taxation of national banking associations. 

RESTRICTIONS ON NOTES LESS THAN ONE DOLLAR. 

718. Sec. 3583.— 

Superseded by section 178, act March 4, 1909. 

Sec. 178. No person shall make, issue, circulate, or ^^^^^ I'S^^ec.": 
pay out any note, check, memorandum, token, or otlier '^^'f^^^v'^igoa! 
obligation for a less sum than one dollar, intended to c.32i,s««^i5-8; 35 
circulate as money or to be received or used in lieu of S''»*- ^■' ^^^a- 
law^ul money of the United States; and every ])erson so 
offending shall be fined not more than five hundred dol- 
lars, or imprisoned not more than six months, or both. 

Note. — This restriction is held to apply only to checks issued for 
ike purpose of circulating as money and not to checks issued in the 
ordinary course of business. 



186 ACTS OF GENERAL NATUBE. 

LEGAL TENDER. 
FOREIGN COINS. 

18^7%. Mfsec.^3; "^19- Sec. 3584.— No foreign gold or silver coins shall 
a Stat, l!, 163. ' be a legal tender in payment of debts. 

Note. — The coinage by the government of Philippine Islands of the 
various silver and minor coins for use in the islands is authorized and 
the legal-tender quality of such coins as well as of the gold coins of the 
United States in the islands is prescribed by the act of July 1, 1902, 
c. 1369, sees. 76-83; 32 Stat. L., 710; and the act of March 2, 1903, c. 
980, sec. 4; 32 Stat. L., 953. 

GOLD COIN OF THE UNITED STATES. 

18^3!%. ^m, s^: ''20. Sec. 3585.— The gold coins of the United States 
14; 17 Stat. L.; shall be a legal tender in all payments at their nominal 
*^ value when not below the standard weight and hmit of 

tolerance provided by law for the single piece, and when, 
reduced in weight below such standard and tolerance, 
shall be a legal tender at valuation in proportion to their 
actual weight. 

721. Sec. 3586.— 

[Superseded by res. July 22, 1876, No. 17, sec. 2; act Feb. 28, 1878, 
c. 20, sec. 1; act June 9, 1879, c. 12, sec. 3.] 

AUTHORIZING COINAGE OF STANDARD SILVER DOLLARS 
AND MAKING THEM LEGAL TENDER. ACT OF FEB- 
RUARY 28, 1878. 

i878^c M^sec.^; '^^^' ^^^- ^- — "^^^^ there shall be coined, at the several 

20 Stat, l'., 25. ' miuts of thc United States, silver dollars of the weight of 

412^ grains Troy of standard silver, as provided in the 
act of January 18, 1837, on which shall be the devices 
and superscriptions provided by said act; which coins 
together with all silver dollars heretofore coined by the 
United States, of Hke weight and fineness, shall be a 
legal tender, at their nominal value, for all debts and 
dues public and private, except where otherwise ex- 
pressly stipulated in the contract. 

SUBSIDIARY SILVER COINS. ACT JUNE 9, 1879. 

18^9*^0. i2Tec. 3- '^^^- ^60. 3.— That the present silver coins of the United 

21 Stat. L.', 8. ' 'States of smaller denominations than one dollar shall 

hereafter be a legal tender in aU sums not exceeding ten 
dollars in full payment of all dues pubhc and private. 

MINOR COINS. 

18^3^*0.^13^; s^: '^^^' ^®°- 3587.— The minor coins of the United States 
16; 17 Stat. L., shall be a legal tender, at their nominal value for any 
^^ amoimt not exceeding twenty-five cents in any one pay- 

ment. 



427. 



UNITED STATES NOTES. 

,Jfn l^\..^'- 725. Sec. 3588.— United States notes shall be lawful 
12 Stat. L. 345. money, and a legal tender m payment of all debts, pubhc 
m^c. 142, sec.\\ and private, within the United States, except for duties 
Res j^ 17' 1863' ^^ iuiports and interest on the pubhc debt. 

No. 9, 12'stat. h.', 823. Act Mar. 3, 1863, c. 73, sec. 3; 12 Stat. L., 711. 



ACTS OF GENERAL NATURE. 187 

DEMAND TREASTRT NOTES. 

Act July 17, 

726. Sec. 3589. — Demand Treasury notes authorized by \f^^^^^ \ ^^g' 
the act of July 17, 1861, chaptei' 5, and the act of Febru- Act Feb. 12, 
ary 12, 1862, chapter 20, shall be lawful money and asut^.' \.f°'338. 
legal tender in like manner as United States notes. *g^* /f^. ^I^* 

1; 12 Stat. L., 345. Act Mar. 17, 1862, c. 45, sec. 2; 12* Stat. L., 37. 

INTEREST-BEARING NOTES. 

727. Sec. 3590. — Treasury notes issued under the au- 
thority of the acts of March 3, 1863, chapter 73, and June 
30, 1864, chapter 172, shall be legal tender to the same 

extent as United States notes, for their face value, ex- Act Mar. 3. 
eluding interest: Provided, That Treasury notes issued o^^ib*^st^at*^L!' 
imder the act last named shall not be a legal tender in "io. ' '' 

payment or redemption of any notes issued b}^ any bank. i864. c"°^72; 
banking association, or banker, calculated and intended ^^'ixh}^ ^^*' 
to circulate as money. 

FOR WHAT DEMANDS NATIONAL-BANK NOTES MAY BE 
RECEIVED. 

728. Sec. 5182.— 

Note. — See section 5182, national-bank act, paragraph 337, ante. 

GOLD CERTIFICATES. ACT JULY 12, 1882. 

Act July 12, 

729. Sec. 12.— That the Secretary of the Treasury is i8|^^ sec. ^i2_: 
authorized and directed to receive deposits of gold coin " • •• • 
with the Treasurer or assistant treasurers of the United 

States, in sums of not less than twenty dollars, and to 
issue certificates therefor in denominations of not less 
than twenty dollars each, corresponding with the de- 
nominations of United States notes. The coin deposited 
for or representing the certificates of deposits shall be 
retained in the Treasurj- for the payment of the same on 
demand. Said certificates shall be receivable for cus- 
toms, taxes, and all public dues, and when so received 
may be reissued; and such certificates, as also silver cer- 
tificates, when held by any national banking association, 
shall be counted as part of its lawful reserve; and no 
national banking association shall be a member of any 
clearing house in which such certificates shall not be re- 
ceivable in the settlement of clearing-house balances: 
Provided, That the Secretary of the Treasury shall sus- 
pend the issue of such gold certificates whenever the 
amount of gold coin and gold bullion in the Treasury 
reserved for the redemption of United States notes falls 
below one hundred millions of dollars; and the provi- 
sions of section fifty-two hundred and seven of the Re- 
vised Statutes shall be applicable to the certificates herein 
authorized and directed to be issued. 

730. Sec. 1.— That gold certificates of the United 191V.* ^"*^- **• 
States payable to bearer on demand shall be and are 
hereby made legal tender in payment of all debts and 
dues, public and private. 



188 ACTS OF GENERAL NATURE. 

Sec. 2. That all acts or parts of acts which are incon- 
sistent with this act are hereby repealed. 

Note. — See section 6 of the currency act of March 14, 1900, as 
amended March 4, 1907, March 2, 1911, and June 12, 1916, paragraph 754, 
post, for additional provisions relating to gold certificates and making 
$10 lowest denomination. Gold and silver certificates are not legal 
tender, but are receivable for all public dues. 

GOVERNMENT DEPOSITARIES. 

DUTY OF DISBURSING OFFICERS. 

Act June 14, 730. Sec. 3620 [as amended 1877]. — It shall be the duty 
see. i ; 14 Stat! of every disbursing officer having any public money in- 
^" Act' Feb 27 trusted to him for disbursement, to deposit the same with 
1877, c 69*. the Treasurer or some one of the assistant treasurers of 
i!^'249. ^ 'the United States, and to draw for the same only as it 
may be required for payments to be made by him in pur- 
suance of law; and draw for the same only in favor of 
the persons to whom payment is made, and all transfers 
from the Treasurer of the United States to a disbursing 
officer shall be by draft or w^arrant on the Treasury or 
an assistant treasurer of the United States. In places, 
however, where there is no Treasurer or assistant treas- 
urer, the Secretary of the Treasury may, when he deems 
it essential to the public interest, specially authorize in 
writing the deposit of such public money in any other 
public depository, or, in writing, authorize the same to be 
kept in any other manner, and under such rules and 
regulations as he may deem most safe and effectual to 
facilitate the payments to public creditors. 

Note.— See also act March 2, 1907, 34 Stat. L., 1166, author- 
izing Army officers to keep in their possession restricted amounts 
of public funds. See also act December 23, 1913, section 15, para- 
graph 734, post. 

PROVISIONS FOR DEPOSIT BY CERTAIN POSTMASTERS. 

Act Mar. 3, 731. Sec. 3847 fas amended 19081. — Any postmaster, 
17 'sta't. L.". having public money belonging to the Government, at an 
^^Act May 27 office withiu a city or town where there is no Treasurer or 
1908. c. 206 ; Assistant Treasurer of the United States, or designated 
415. ^*^*' ^ ' depositary, may deposit the same temporarily, at his own 
risk and in his official capacity, in any national or State 
bank in the State in which the said postmaster resides, 
or in which his office is located, or within a reasonable 
radius of his post office in an adjacent State, but no 
authority or permission is or shall be given for the pay- 
ment to or receipt by a postmaster or any other person, 
of interest, directly or indirectly, on any deposit made 
as herein described. 

MISAPPROPRIATING POSTAL FUNDS OR PROPERTY; 
PUNISHMENT FOR; PRIMA FACIE EVIDENCE; DEPOS- 
ITS, ETC., PERMITTED. 

732. Sec. 4046.— (Originally enacted June 8, 1872.) 
Superseded by sec. 225, act of March 4, 1909. 



ACTS OF GENERAL NATURE. 189 

Sec. 225. — Whoever, being a postmaster or other per- ^^^^^^ f^^- *• 
son employed in or connected with any branch of the 225;'35'8tat. l.', 
postal service, shall loan, use, pledge, hypothecate, or ''^^' 
convert to his own use, or shall deposit in any bank, or 
exchange for other funds or property, except as author- 
ized by law, any money or property coming into his hands 
or under his control in any manner whatever, in the exe- 
cution or under color of his office, employment, or service, 
whether the same shall be the money or property of the 
United States or not ; or shall fail or refuse to remit to or 
deposit in the Treasury of the United States or in a desig- 
nated depository, or to account for or turn over to the 
proper officer or agent, any such money or property, 
when required so to do by law or the regulations of the 
Post Office Department, or upon demand or order of the 
Postmaster General, either directly or through a duly 
authorized officer or agent, shall be deemed guilty of 
embezzlement; and every such person, as well as every 
other person advising or knowingly participating therein, 
shall be fined in a sum equal to the amount or value of the 
money or property embezzled, or imprisoned not more 
than ten years, or both. Any failure to produce or to pay 
over any such money or property, when required so to do 
as above provided, shall be taken to be prima facie evi- 
dence of such embezzlement; and upon the trial of any 
indictment against any person for such embezzlement, it 
shall be prima facie evidence of a balance against him to 
produce a transcript from the account books of the Audi- 
tor for the Post Office Department. But nothing herein 
shall be construed to prohibit any postmaster depositing, 
xmdor the direction of the Postmaster General, in a na- 
tional bank designated by the Secretary of the Treasury 
for that purpose, to his own credit as postmaster, any 
funds in his charge, nor prevent his negotiating drafts or 
other evidences of debt through such bank, or through 
United States disbursing officers, or otherwise, when in- 
structed or required so to do by the Postmaster General, 
for the purpose of remitting surplus funds from one post 
office to another. 

NATIONAL BANKING ASSOCIATIONS TO BE DEPOSITA- 
RIES OF PUBLIC MONEYS. 

733. Sec. 5163 [as amended 19071.— 
Note. — See section 5153 under "National-bank act." 

GOVERNMENT DEPOSITS. 

734. Sec. 15.— The moneys held in the general fund oi ^J^^^^^^fJ^ 
the Treasury, except the five per centum fund for the L.,'2ci.' 
redemption of outstanding national-bank notes and the 

funds provided in this Act for the redemption of Federal 
reserve notes may, upon, the direction of the Secretary of 
the Treasury, be deposited in Federal reserve banks, which 
banks, when required by the Secretary of the Treasury, 
shaU act as fiscal' agents of the United States; and the 
revenues of the Government or any part thereof may be 



190 ACTS OF GENERAL NATURE. 

deposited in such banks, and disbursements may be made 
by checks drawn against such deposits. 

No public funds of the Philippine Islands, or of the 
postal savings, or any Government funds, shall be de- 
posited in the continental United States in any bank 
not belonging to the sj'stem established by this Act: 
Provided, however, That nothing in this Act shall be con- 
strued to deny the right of the Secretary of the Treasury 
to use member banks as depositories. 

DEPOSIT OF PROCEEDS ARISING FROM SALE OF BONDS, 
NO RESERVE REQUIRED TO BE KEPT AGAINST UNITED 
STATES DEPOSITS. 

wnfsec^r ^' ''3^- .Sec. 7.— That the Secretary of the Treasury, in hia 
discretion, is hereby authorized to deposit in such banks 
and trust companies as he may designate the proceeds, or 
any part thereof, arising from the sale of the bonds and 
certificates of indebtedness authorized by this Act, or the 
bonds previously authorized as described in section four 
of this Act, and such deposits may bear such rate of in- 
terest and be subject to such terms and conditions as the 
Secretary of the Treasury may prescribe: Provided, That 
the amount so deposited shall not in any case exceed 
the amount withdrawn from any such bank or trust com- 
pany and invested in such bonds or certificates of indebt- 
edness plus the amount so invested by such bank or 
trust company, and such deposits shall be secured in the 
manner required for other deposits by section fifty-one 
hundred and fifty-three. Revised Statutes, and amend- 
ments thereto: Provided further, That the provisions of 
section fifty-one hundred and ninety-one of the Revised 
Statutes, as amended by the Federal Reserve Act and the 
amendments thereof, with reference to the reserves re- 
quired to be kept by national banking associations and 
other member banks of the Federal Reserve System, shall 
not apply to deposits of public moneys by the United 
Statas m designated depositaries. 

GOVERNMENT DEPOSITS IN FEDERAL LAND BANKS. 

iQief si;% ^9 "^^e. Sec. 6.— That all Federal land banks and joint stock 
Stat. L., 365.' land banks organized under this Act, when designated for 
that purpose by the Secretary of the Treasury, shall be 
depositaries of pubhc money, except receipts from cus- 
toms, under such regulations as may be prescribed by 
said Secretary; and they may also be employed as finan- 
cial agents of the Government; and they shall perform 
all such reasonable duties, as depositaries of public money 
and financial agents of the Government, as may be re- 
quired of them. And the Secretary of the Treasury shall 
require of the Federal land banks and joint stock land 
banks thus dasignated satisfactory security, by the deposit 
of United Statas bonds or othertvise, for the safekeeping 
and prompt payment of the pubhc money deposited with 
them, and for the faithful performance- of their duties as 
financial agents of the Government. No Government 



ACTS OF GENERAL. NATURE. 191 

funds deposited under the provisions of this section shall 
be invested in mortgage loans or farm loan bonds. 

PENALTY FOR UNAUTHORIZED DEPOSIT OF PUBLIC 
MONEY. 

737. Sec. 5488.— 

Originally enacted .Tune 14, 1SG6, see 14 Stat. L. 64. Superseded 
by sec. 87 of the act of Ma rch 4, 1909. 

Sec. 87. — Whoever, being a disbursing ofl5cer of the i^^^ ^^^ ^JJ' 
United States, or a person acting as such, shall in any 2; i^ stat. t., 64. 
manner convert to his own use, or loan with or without igogf c. ^2^,' sec! 
interest, or deposit in any place or in any manner, except f^^^ ^^^- ^•» 
as authorized by law, any pubhc money intrusted to him; 
or shall, for any purpose not prescribed by law, withdraw 
from the Treasurer or any assistant treasurer, or any au- 
thorized depositary, or transfer, or apply, any portion of 
the public money intrusted to him, shall be deemed guilty 
of an embezzlement of the money so converted, loaned, 
deposited, withdrawn, transferred, or applied, and shall be 
fined not more than the amount embezzled, or imprisoned 
not more than ten years, or both. 

Note. — Sections 5489 to 5496 do not refer to national banks. 

PENALTY FOR UNAUTHORIZED RECEIPT OR USE OP 
PUBLIC MONEY. 

738. Sec. C497.— 

Originally enacted June 14, 1866 (14 Stat. L. 65), and amended by 
act of February 3, 1879 (20 Stat. L. 280). Superseded by sec. 96 of the 
act of March 4, 1909. 

Sec. 96. — Every banker, broker, or other person not an ig^^*^ sec^'ge- k 
authorized depositary of pubUc moneys, who shall know- stat'. l., iioe.' 
ingly receive from any disbursing officer, or collector of 
internal revenue, or other agent of the United States, any 
pubhc money on deposit, or by way of loan or accommo- 
dation, with or without interest, or otherwise than in pay- 
ment of a debt against the United States, or shall use, 
transfer, convert, appropriate, or apply any portion of the 
pubhc money for any purpose not prescribea by law; and 
every president, cashier, teller, director, or other officer of 
any bank or banking association who shall violate any 
provision of this section is guilty of embezzlement of the 
pubhc money so deposited, loaned, transferred, used, con- 
verted, appropriated, or apphed, and shall be fined not 
more than the amount embezzled, or imprisoned not more 
than ten years, or both. 

Note. — For duties and liabilities of depositaries see note under sec. 
5153, paragraph 243, ante. 

OFFENSES AGAINST THE CURRENCY. 

OBLIGATION OR OTHER SECURITY OF THE UNITED 
STATES DEFINED. 

739. Sec. 147. — The words "obhgation or other security ,q4*^„ ^„^- *> 

... Ill n 1-111 11 1 1 lyoa, c. 321, sec. 

of the United States shall be held to mean all bonds, cor- H7; 35 stat. l., 
tificates of indebtedness, national-bank currency, cou- li^^^u^^l^s.*'*^ 
pons. United States notes. Treasury notes, gold certifi- pJ^J^l^ j^J ^ 
cates, silver certificates, fractional notes, certificates of i864. 



192 ACTS OF GENERAL NATURE. 

deposit, bills, checks, or drafts for money, drawn by oi 
upon authorized officers of the United States, stamps and 
other representatives of value, of whatever denomination, 
which have been or may be issued under any Act of 
Congress. 

FORGING OR COUNTERFEITING SECURITIES; PUNISH- 
MENT FOR. 

10;^''*-, ¥o^- J.' 740. Sec. 148. — Whoever, with intent to defraud, shall 

1909, C. 321, sec. «,-, ii< ,(••■ ii iTi' 

148; 35 Stat. L., falscly make, forge, counterfeit, or alter any obligation or 
sec^sif^"^"!.^^^ other security of the United States shall be fined not more 
enactecf JunV 30 ^'^^^ ^^^ thousaud dollars and imprisoned not more than 
1864. ' fifteen years. 

COUNTERFEITING NATIONAL-BANK NOTES; PUNISH- 
MENT FOR. 

i909'*c m*^ sec' "^^^^ ^®^* ^^^' — Whoever shall falsely make, forge, or 
i49;'35' Stat. L.'. crounterfcit, or cause or procure to be made, forged, or 
lec^Mfs?^"!!^*^ counterfeited, or shall willingly aid or assist in falsely 
enacted F°b ' 25^ marking, forging, or counterfeiting, any note in imitation 

1863. Reenacteci of, or purporting to be in imitation of, the circulating 
June 3, 1S64. notes issued by any banking association now or hereafter 

authorized and acting under the laws of the United States; 
or whoever shall pass, utter, or pubhsh, or attempt to 
pass, utter, or publish, any false, forged, or counterfeited 
note, purporting to be issued by any such association do- 
ing a banking business, knowing the same to be falsely 
made, forged, or counterfeited; or whoever shall falsely 
alter, or cause or procure to be falsely altered, or shall 
wilhngly aid or assist in falsely altering, any such circulat- 
ing notes, or shall pass, utter, or publish, or attempt to 
pass, utter, or pubhsh as true, any falsely altered or 
spurious circulating note issued, or purporting to have 
been issued, by any such banking association, knowing 
the same to be lalsely altered or spurious, shall be fined not 
more than one thousand dollars and imprisoned not more 
than fifteen years, 

USING PLATES TO PRINT NOTES WITHOUT AUTHORITY, 
ETC.; DISTINCTIVE PAPER WITHOUT AUTHORITY; 
PUNISHMENT FOR. 

1909^% ^2^ sec' '''^^* ^®^' ^^^' — Whoever, having control, custody, or 
150; '35' Stat. L.' posscssiou of any plate, stone, or other thing, or any part 
sec^;54l)^^!^s.'^^^ thereof, from which has been printed, or which may be 
enacted JunV 30 Prepared by direction of the Secretary of the Treasury for 

1864. ' the purpose of printing, any obhgation or other security 

of the United States, shall use such plate, stone, or other 
thing, or any part thereof, or knowingly suffer the same to 
be used for the purpose of printing any such or similar ob- 
hgation or other security, or any part thereof, except as 
may be printed for the use of the United States by order 
of the proper officer thereof; or whoever by any way, art, 
or means shall make or execute, or cause or procure to be 
made or executed, or shaU assist in making or executing 
any plate, stone, or other thing in the hkeness of any plate 
designated for the printing of such obligation or other se- 
curity; or whoever shall sell any such plate, stone, or other 
thing, or bring into the United States or any place subject 



ACTS OP GENERAL NATURE. 193 

to the jurisdiction thereof, from any foreign place, any 
such plate, stone, or other thing, except under the direc- 
tion of the Secretary of the Treasury or other proper offi- 
cer, or with any other intent, in either case, than that such 
plate, stone, or other thing be used for the printing of the 
obligations or other securities of the United States; or 
whoever shall have in his control, custody, or possession 
any plate, stone, or other thing in any manner made after 
or in the similitude of any plate, stone, or other thing, 
from which any such obligation or other security has been 
printed, with intent to use such plate, stone, or other 
thing, or to suffer the same to be used in forging or coun- 
terfeiting any such obhgation or other security, or any 
part thereof; or whoever shall have in his possession or 
custody, except under authority from' the Secretary of the 
Treasury or other proper officer, any obligation or other 
security made or executed, in whole or in part, after the 
simihtude of any obligation or other security issued under 
the authority of the United States, with intent to sell or 
otherwise use the same; or whoever shall print, photo« 
graph, or in any other manner make or execute, or cause 
to be printed, photographed, made, or executed, or shall 
aid in printing, photographing, making, or executing any 
engraving, photograph, print, or impression in the hke- 
ness of any such obligation or other security, or any part 
thereof, or shall sell any such engraving, photograph, 
print, or impression, except to the United States, or shall 
bring into the United States or any place subject to the 
jurisdiction thereof, from any foreign place any such en- 
graving, photograph, print, or impression, except by direc- 
tion of some proper officer of the United States; or who- 
ever shall have or retain in his control or possession, after 
a distinctive paper has been adopted by the Secretary of 
the Treasury for the obligations and other securities of the 
United States, any similar paper adapted to the making 
of any such obligation or other security, except under the 
authority of the Secretary of the Treasury or some other 
proper officer of the United States, shall be fined not more 
than five thousand dollars, or imprisoned not more than 
fifteen years, or both. 

UTTERING, ETC., FORGED OBLIGATIONS; PUNISHMENT 
FOR. 

743. Sec. 151. — Whoever, with intent to defraud, shall ,^^\ "«,•■• ^ *• 
pass, utter, publish, or sell, or attempt to pass, utter, pub- isi; 35 stat. l., 
lish, or sell, or shall bring into the United States or any si^l^o^^^ri!**' 
place subject to the jurisdiction thereof, with intent to ^ VJjf 'i^^'U' 

'■ 1 !• 1 ij 11 1 11 1 • • enacieu June ju, 

pass, publish, utter, or sell, or shall keep in possession or ise*. 
conceal with like intent, any falsely made, lor^ed, coun- 
terfeited, or altered obligation or other security of the 
United States, shall be fined not more than five thousand 
dollars and iin])risoned not more than fifteen years. 

104312°— 20 13 



194 ACTS OF GENERAL NATUEE. 

TAKING IMPRESSIONS OF TOOLS, IMPLEMENTS, ETC.; 
PUNISHMENT FOR. 

i909°*c ?2T' sto! ''^- ^®°" ^^^- — Whoever, without authority from the 
i52;'35'stat. L." United States, shall take, procure, or make, upon lead, 
soc^543l"?i!^s'.^^ foil, wax, plaster, paper, or any other substance or mate- 
enacted 'peb^ ^'^ ^^^^> ^^ impression, stamp, or imprint of, from, or by the 
1867, ' ' use of any bedplate, bedpiece, die, roll, plate, seal, type, or 

other tool, implement, instrument, or thing used or fitted 
or intended to be used in printing, stamping, or impress- 
ing, or in making other tools, implements, instruments, or 
things to be used or fitted or intended to be used in print- 
ing, stamping, or impressing any kind or description of 
obligation or other security of the United States now 
authorized or hereafter to be authorized by the United 
States, or circulating note or evidence of debt of any bank- 
ing association under the laws thereof, shall be fined not 
more than five thousand dollars, or imprisoned not more 
than ten years, or both. 

HAVING UNLAWFUL POSSESSION OF IMPRESSIONS; 
PUNISHMENT FOR. 

i9M°*c S' se^! '^^^- ^^^' 153.— Whoever, with intent to defraud, shall 
153; '35' Stat. L.' have in his possession, keeping, custody, or control, with- 
sec^Msl^^il^s!^'^ out authority from the United States, any imprint, stamp, 
enactecf 'peb' '5^ ^^ impression, taken or made upon any substance or mate- 
1867. ' ' rial whatsoever, of any tool, unplement, instrument, or 

thing, used, or fitted or intended to be used, for any of the 
purposes mentioned in the preceding section ; or whoever, 
with intent to defraud, shall sell, give, or deliver any such 
imprint, stamp, or impression to any other person, shall 
be fined not more than five thousand dollars, or impris- 
oned not more than ten years, or both. 

DEALING IN COUNTERFEIT SECURITIES; PUNISHMENT 
FOR. 

i9^°*c ^2T*seo' '^^^* ^^^' ^^^' — Whoever shall buy, sell, exchange, 
i54;'35'sta^. L.*, transfer, receive, or deliver any false, forged, counter- 
secJ543^4"^!^^s!^" f eited, or altered obligation or other security of the United 
enactid ^Fsb' V States, or circulating note of any banking association or- 
1867. ' ' ganized or acting under the laws thereof, which has been 

or may hereafter be issued by virtue of any Act of Con- 
gress, with the intent that the same be passed, published, 
or used as true and genuine, shall be fined not more than 
five thousand dollars, or imprisoned not more than ten 
years, or both. 

CIRCULATING BILLS OF EXPIRED BANKS; PUNISHMENT 
FOR; CIRCULATION PERMITTED. 

1909* c mY' sec' '''*''• Sec. 174. — Inallcases where the charter of any cor- 
174; '35" sta^. L.", poratiou which has been or may be created by Act of Con- 
fiia S43^7"?i"s!^*^ gress has expired or may hereafter expire, if any director, 
•nacti^'jufy '/ officer, or agent of the corporation, or any trustee thereof, 
1838. ' or any agent of such trustee, or any person having in his 

possession or under his control the property of the corpo- 



ACTS OF GENERAL NATURE. 



195 



ration for the purpose of paying or redeeming its notes 
and obligations, shall knowingly issue, reissue, or utter ag 
money, or in any other way knowingly put in circulation 
any bill, note, check, draft, or other security purporting 
to have been made by any such corporation whose charter 
has expired, or by any officer thereof, or purporting to 
have been made under authority derived therefrom, or if 
any person shall knowingly aid in any such act, he shall be 
fined not more than ten thousand dollars, or imprisoned 
not more than five years, or both. But nothing herein 
shall be construed to make it-unlawful for any person, not 
being such director, officer, or agent of the corporation, 
or any trustee thereof, or any agent of such trustee, or any 
person having in his possession or under his control the 
property of the corporation for the purpose hereinbefore 
set forth, who has received or may hereafter receive such 
bill, note, check, draft, or other security, bona fide and in 
the ordinary transactions of business, to utter as money or 
otherwise circulate the same. 

FRAUDULENT NOTES TO BE SO MARKED BY UNITED 
STATES OFFICERS AND OFFICERS OF NATIONAL 
BANES. ACT JUNE 30, 1876. 

748. Sec. 5.— That all United States officers charged ^^^^ Jji°«. 3o, 
with the receipt or disbursement of public moneys, and stat'. l., m.' ' 
all officers of national banks, shall stamp or write in plain 
letters the word "counterfeit" "altereci" or "worthless," 
upon all fraudulent notes issued in the form of, and in- 
tended to circulate as money, which shall be presented at 
their places of business; and if such officer shall wrong- 
fully stamp any genuine note of the United States, or of 
the national banks, they shall, upon presentation, redeem 
such notes at the face value thereof. 



CURRENCY ACT, APPROVED MARCH 14, 1900. 



749. Section 1. Gold dollar declared to be 

standard unit of value. 

750. Sec. 2. Secretary of Treasury to set 

apart and maintain a gold reserve 
of one hundred and fifty million 
dollars in gold coin and bullion 
for the redemption of United 
States notes and notes issued 
under the act of July 14, 1890. 
May sell bonds to replenish re- 
serve. 

751. Sec. 3. Silver dollar to remain legal 

tender. 

752. Sec. 4. Divisions of issue and e- 

demption established. 

753. Sec. 5. When silver dollars are 

coined from bullion purchased 
under act of July 14, 1890, an 
equal amount of Treasury notes 
to be canceled and silver certifi- 
cates issued. 



754 



7.55. 
756. 
757. 

758. 



759. 
760. 



761. 
762. 



Sec. 6. Issue of gold certificates. 
Issue of gold certificates payable 
to order. 

Sec. 7. Issue of silver certificates. 

Sec. 8. Subsidiary silver coinage. 

Sec. 9. Recoinage of uncurrent sub- 
sidiary silver coin. 

Sec. 10. Amends section 5138, Re- 
vised Statutes. (See said sec- 
tion under national-bank act.) 

Sec. 11. Refunding of United Statea 
bonds. 

Sec. 13. This section is inserted in 
national-bank act following sec- 
tion 5171. which it supersedes. 

Sec. 13. See sec. 5214, Revised Stat- 
utes, under national-bank act. 

Sec. 14. International bimetallism. 



An Act To define and fix the standard of value, to maintain the parity 
of all forms of money issued or coined by the United States, to refund 
the public debt, and for other purposes. 



196 ACTS OF GENERAL NATURE. 

GOLD DOLLAR DECLARED TO BE STANDARD UNIT OF 
YALUE. 

19TO * s^^^i- "i ''^^- -^^ '^^ enacted hy the Senate and House of Repre- 
Stat'. L., 45. ' sentatives of the United States of America in Congress 
assembled, That the dollar consisting of twenty-five and 
eight-tenths grains of gold nine-tenths fine, as established 
by section thirty-five hundred and eleven of the Revised 
Statutes of the United States, shall be the standard unit 
of value, and all forms of money issued or coined by the 
United States shall be maintained at a parity of value 
with this standard, and it shall be the duty of the Secre- 
tary of the Treasury to maintain such parity. 

SECRETARY OF TREASURY TO SET APART AND MAIN- 
TAIN A GOLD RESERVE OF ONE HUNDRED AND FIFTY 
MILLION DOLLARS IN GOLD COIN AND BULLION FOR 
THE REDEMPTION OF UNITED STATES NOTES AND 
NOTES ISSUED UNDER ACT OF JULY 14, 1890. MAT 
SELL BONDS TO REPLENISH RESERVE. 

jg^rt s^^2- "' '^^^- ^®°- 2.— That United States notes, and Treasury 
Stat. L., 45. ' notes issued under the Act of July fourteenth, eighteen 
hundred and ninety, when presented to the Treasury for 
redemption, shall be redeemed in gold coin of the stand- 
ard fixed in the first section of this Act, and in order to 
secure the prompt and certain redemption of such notes 
as herein provided it shall be the duty of the Secretary of 
the Treasury to set apart in the Treasury a reserve fund 
of one hundred and fifty million dollars in gold coin and 
bullion, which fund shall be used for such redemption 
purposes only, and whenever and as often as any oi said 
notes shall be redeemed from said fund it shall be the 
duty of the Secretary of the Treasiu-y to use said notes so 
redeemed to restore and maintain such reserve fund in 
the manner foUo\s'ing, to wit: First, by exchanging the 
notes so redeemed for any gold coin in the general fund of 
the Treasury; second, by accepting deposits of gold coin 
at the Treasury or at any subtreasury in exchange for the 
United States notes so redeemed ; third, by procuring gold 
coin by the use of said notes, in accordance with the pro- 
visions of section thirty-seven hundred of the Revised 
Statutes of the United States. If the Secretary of the 
Treasury is unable to restore and maintain the gold coin 
in the reserve fund by the foregoing methods, and the 
amount of such gold coin and bullion in said fund shall at 
any time fall below one hundred million dollars, then it 
shall be his duty to restore the same to the maximum sum 
of one hundred and fifty million dollars by borrowing 
money on the credit of the United States, and for the 
debt thus incurred to issue and sell coupon or registered 
bonds of the United States, in such form as he may pre- 
scribe, in denominations of fifty dollars or any multiple 
thereof, bearing interest at the rate of not exceeding three 

Ear centum per annum, payable quarterly, such bonds to 
e payable at the pleasure of the United States after one 
year from the date of their issue, and to be payable, prin- 



ACTS OF GENERAL NATURE. J 97 

cipal and interest, in gold coin of the present standard 
value, and to be exempt from the payment of all taxes or 
duties of the United otates, as well as from taxation in 
any form by or under State, municipal, or local author- 
ity; and the gold coin received from the sale of said bonds 
shall first be covered into the general fund of the Treas- 
ury and then exchanged, in the manner hereinbefore pro- 
vided, for an equal amount of the notes redeemed and 
held for exchange, and the Secretary of the Treasury 
may, in his discretion, use said notes in exchange for 
gol(i, or to purchase or redeem any bonds of the United 
States, or for any other lawful purpose the pubHc in- 
terests may recjuire, except that tliey shall not be used to 
meet deficiencies in the current revenues. That United 
States notes when redeemed in accordance \nth the pro- 
visions of this section shall be reissued, but shall be held 
in the reserve fmid until exchanged for gold, as herein 

f>rovided; and the gold coin and bullion in the reserve 
und, together with the redeemed notes held for use as 
provided in this section, shall at no time exceed the 
maximum siun of one hundred and fifty million dollars. 

Note. — Section 7 of the Federal reserve act provides that the net 
eamingrs derived by the United States from Federal reserve banks shall, 
in the discretion of the Secretary, be used to supplement the gold reserve 
held against outstanding United States notes, or shall be applied to the 
reduction of the outstanding bonded indebtedness of the United States 
under regulations to be prescribed by the Secretary of the Treasury. 

SILVER DOLLAR TO REMAIN LEGAL TENDER. 

751. Sec. 3. — That nothing contained in this Act shall jg^ct Mar u, 
be construed to effect the legal-tender quality as now pro- stat. i^,'i6.' ^^ 
vided by law of the silver dollar, or of any other money 
coined or issued by the United States. 

DIVISIONS OF ISSUE AND REDEMPTION ESTABLISHED. 

762. Sec. 4. — That there be established in the Treasury ^^^ Mar. u. 
Department, as a part of the office of the Treasurer of the stat' l^46. ' 
United States, divisions to be designated and known as 
the division of issue and the division of redemption, to 
which shall be assigned, respectively, under sucn regula- 
tions as the Secretary of the Treasury may approve, all 
records and accounts relating to the issue and redemption 
of United States notes, gold certificates, silver certificates, 
and currency certificates. There shall be transferred 
from the accounts of the general fund of the Treasury of 
the United States, and taken up on the books of said di- 
visions, respectively, accounts relating to the reserve fund 
for the redemption of United States notes and Treasury 
notes, the gold coin held against outstanding gold certifi- 
cates, the United States notes held against outstanding 
currency certificates, and the silver dollars held against 
outstanding silver certificates, and each of the funds rep- 
resented by these accounts shall be used for the redemp- 
tion of the notes and certificates for which they are 
respectively pledged, and shall be used for no other pur- 
pose, the same being held as trust funds. 



198 ACTS OF GENERAL NATURE. 

WHEN SILVER DOLLARS ARE COINED FROM BULLION 
• PURCHASED UNDER ACT OF JULY 14, 1890, AN EQUAL 
AMOUNT OF TREASURY NOTES TO BE CANCELED AND 
SILVER CERTIFICATES ISSUED. 

lew* s^% ^k '^^^' ^^^- 5.— That it shall be the duty of the Secretary 
Stat. L., 47. ' of the Treasury, as fast as standard silver dollars are 
coined under the provisions of the Acts of July four- 
teenth, eighteen hundred and ninety, and June thirteenth, 
dighteen hundred and ninety-eight, from buUion pur- 
chased under the Act of July fourteenth, eighteen hun- 
dred and ninety, to retire and cancel an equal amount of 
Treasury notes whenever received into the Treasury, 
either by exchange in accordance with the provisions of 
this Act or in the ordinary course of business, and upon 
the cancellation of Treasury notes silver certificates shall 
be issued against the silver dollars so coined. 

ISSUE OF GOLD CERTIFICATES. ISSUE OF GOLD CER- 
TIFICATES PAYABLE TO ORDER. 

jgAct ^Mar. 14^ 754. Sec. 6 [as amended by acts of March 4, 1907, March 2, 
Stat. L., 47. ' 1911, and June 12, 1916]. — That the Secretary of the Treas- 
sec^f: 34*stat;^L!; ury is hereby authorized and directed to receive deposits of 
^^Act Mar 2 S^ld coin with the Treasurer, or any assistant treasurer of 
1911; 36 Stat. L.; the United States, in sums of not less than twenty dollars, 
^ct June 12, a-nd to issuc gold certificates therefor in denominations 
1916; 39 Stat. L., of not less than ten dollars, and the coin so deposited shall 
be retained in the Treasury and held for the payment of 
such certificates on demand, and used for no other pur- 
pose. Such certificates shall be receivable for customs, 
taxes, and all pubhc dues, and when so received may be 
reissued, and when held by any national banking asso- 
ciation may be counted as a part of its la%vful reserve: 
Provided, That whenever and so long as the gold coin 
and bullion held in the reserve fund in the Treasury for 
the redemption of United States notes and Treasury 
notes shall fall and remain below one hundred million 
dollars the authority to issue certificates as herein pro- 
vided shall be suspended: And provided further, Thsit 
whenever and so long as the aggregate amount of United 
States notes and silver certificates in the general fund of 
the Treasury shall exceed sixty million dollars the Secre- 
tary of the Treasury may, in his discretion, suspend the 
issue of the certificates herein provided for: And pro- 
vided further, That of the amount of such outstanding 
certificates one-fourth at least shall be in denominations 
of fifty dollars or less : And provided further, That the 
Secretary of the Treasury may, in his discretion, issue 
such certificates in denominations of ten thousand dollars, 
payable to order: And provided further. That the Secre- 
tary of the Treasury may, in his discretion, receive, with 
the assistant treasurer in New York and the assistant 
treasurer in San Francisco, deposits of foreign gold coin 
at their bullion value in amounts of not less than one 
thousand dollars in value and issue gold certificates there- 



ACTS OF GENERAL NATURE. 199 

for of the description herein authorized: And provided 
further, That the Secretary of the Treasury may, in his 
discretion, receive, with the Treasurer or any assistant 
treasurer of the United States, deposits of gold buUion 
bearing the stamp of the coinage mints of the United 
States, or the assay office in New York, certifying their 
weight, fineness, and value, in amounts of not less than 
one thousand dollars in value, and issue gold certificates 
therefor of the description herein authorized. But the 
amount of gold buUion and foreign coin so held shall not 
at any time exceed two thirds of the total amount of gold 
certificates at such time outstanding. And section fifty- 
one hundred and ninety-three of the Revised Statutes of 
the United States is hereby repealed. 

ISSUE OF SILVER CERTIFICATES. 

755. Sec. 7. — That hereafter silver certificates shall be ,Jt^^ ^'4 H 
issued only of denominations of ten dollars and under, stat. l., 47. ' 
except that not exceeding in the aggregate ten per centum 
of the total volume of said certificates, in the discretion 
of the Secretary of the Treasur}^, may be issued in denom- 
inations of twenty dollars, fifty dollars, and one hundred 
dollars; and silver certificates of higher denomination 
than ten dollars, except as herein provided, shall, when- 
ever received at the Treasury or redeemed, be retired and 
canceled, and certificates of denominations of ten dollars 
or less shall be substituted therefor, and after such sub- 
stitution, in whole or in part, a Uke volume of United 
States notes of less denomination than ten dollars shall 
from time to time be retired and canceled, and notes of 
denominations of ten dollars and upward shall be reis- 
sued in substitution therefor, with like quahties and re- 
strictions as those retired and canceled. 

Note. — The act of February 28, 1878, authorized the issue of silver 
certificates in sums of not less than ten dollars. The act of March 3, 
1887, authorized the issue of one, two, and five dollar certificates. 
This section supersedes these acts as to all new issues. 

SUBSIDIARY SILVER COINAGE. 

766, Sec. 8.— That the • Secretary of the Treasury is .^''t 5^'': [*: 
hereby authorized to use, at his discretion, any silver stat. l., 47. 
bullion in the Treasury of the United States purchased 
under the Act of July fourteenth, eighteen hundred and 
ninety, for coinage into such denominations of subsidiary 
silver coin as may be necessary to meet the public require- 
ments for such coin: Provided, That the amount of sub- 
sidiary silver coin outstanding sliall not at any time ex- 
ceed in the aggregate one hundred millions of dollars. 
Whenever an}^ silver bullion purchased under tlie Act of 
July fourteenth, eighteen hundred and ninety, shall bo 
used in the coinage of subsidiar}^ silver coin, an amount 
of Treasury notes issued under said Act equal to the cost 
of the bullion contained in such coin shall be canceled 
and not reissued. 



200 ACTS OF GENERAL NATURE. 

EECOINAGE OF UNCURRENT SUBSIDIARY SILVER COIN. 

i9oo:*sec% 31 '^^'^' Sec. 9.--That the Secretary of the Treasury is 
Stat'. L,, 48. ' hereby authorized and directed to cause all worn and un- 
cmrent subsidiary silver coin of the United States now 
in the Treasury, and hereafter received, to be recoined, 
and to reimburse the Treasurer of the United States for 
the difference between the nominal or face value of such 
coin and the amount the same will produce in new coin 
from any moneys in the Treasury not otherwise appro- 
priated. 

758. Sec. 10.— 

Amends section 5138, Re\Tsed Statutes. (See said section under 

National-bank act.) 

REFUNDING OF UNITED STATES BONDS. 

i9oo\t^h; ^zi "^^^^ S®^' 11-— That the Secretary of the Treasury is 
Stat. L.,k ' hereby authorized to receive at the Treasury any of the 
outstanding bonds of the United States bearing interest 
at five per centum per annum, paj-able February first, 
nineteen hundred and four, and any bonds of the United 
States bearing interest at four per centum per annimi, 
payable July first, nineteen hundred and seven, and any 
bonds of the United States bearing interest at three per 
centum per annum, payable August first, nineteen hun- 
dred and eight, and to issue in exchange therefor an equal 
amount of coupon or registered bonds of the United 
States in such form as he may prescribe, in denomina- 
tions of fifty dollars or any multiple thereof, bearing 
interest at the rate of two per centum per annum, payable 
quarterly, such bonds to be payable at the pleasure of 
the United States after thirty years from the date of 
their issue, and said bonds to be payable, principal and 
interest, in gold coin of the present standard value, and 
to be exempt from the payment of all taxes or duties 
of the United States, as well as from taxation in any 
form by or under State, municipal, or local authority: 
Provided, That such outstanding bonds may be received 
in exchange at a valuation not greater than their present 
worth to yield an income of two and one-quarter per 
centum per annum ; and in consideration of the reduction 
of interest effected, the Secretary of the Treasury is au- 
thorized to pay to the holders of the outstanding bonds 
surrendered for exchange, out of any money in the Treas- 
ury not otherwise appropriated, a sum not greater than 
the difference between their present worth, computed as 
aforesaid, and their par value, and the payments to be 
made hereunder shall be lield to be payments on account 
of the sinking fund created by section thirty-six hundred 
and ninety-four of the Revised Statutes: And jJf'ovided 
further, That the two per centum bonds to be issued un- 
der the provisions of this Act shall be issued at not less 
than par, and they shall be numbered consecutively in 
the order of their issue, and when payment is made the 



ACTS OF GENERAL NATURE. 201 

last numbers issued shall be first paid, and this order shall 
be followed until all the bonds are paid, and whenever 
any of the outstanding bonds are called for payment in- 
terest thereon shall cease tliree months after such call; 
and there is hereby appropriated out of any money in 
the Treasury not otherwise appropriated, to effect' the 
exchanges of bonds provided for in this Act, a sum not 
exceeding one-fifteenth of one per centum of the face 
value of said bonds, to pay the expense of preparing and 
issuing the same and other expenses incident thereto. 

760. Sec. 12.— 

This section is inserted in the national-bank act following sectioQ 
5171 wh"ch it supersedes. 

761. Sec. 13.— 
See paragraph 445. 

INTERNATIONAL BIMETALLISM. 

762. Sec. 14.— That the provisions of this Act are not 19^"* se?"i4- si 
intended to preclude the accomplishment of inter- stat, u%9. ' 
national bimetallism whenever conditions shall make it 
expedient and practicable to secure the same by concur- 
rent action of the leading commercial nations of the 

world and at a ratio which shall insure permanence of 
relative value between gold and silver. 

ACT MARCH 4, 1907. 

763. Sec. 1. Amends section 6 of act of 

March 14. 1900. 

764. Sec. 2. Issue of Treasury notes. 

765. Sec. 3. Amends section 5153 of the 

Revised Statutes. 

763. Sec. 1, Act March 4, 1907. 

Amends section 6 of act of March 14, 1900. This amended section 
is incorporated in said act, paragraph 754, ante. 

ISSUE OF TREASURY NOTES. ACT MARCH 4, 1907. 

764. Sec. 2.— That whenever and so long as the out- ^^S* ^ec^%'- h 
standing silver certificates of the denominations of one >"tat'. l, Liiii. 
dollar, two dollars, and five dollars, issued under the 
provisions of section seven of an Act entitled "An Act 

to define and fix the standard of value, to maintam the 
parity of all forms of money issued or coined by the 
United States, to refund the public debt, and for other 
])urposes," approved March fourteenth, nineteen hun- 
dred, shall be, in the opinion of the Secretary of the 
Treasury, insufficient to meet the public demand there- 
for, he is hereby authorized to issue United States notes 
of the denominations of one dollar, two dollars, and five 
dollars, and upon the issue of United States notes of such 
denominations an equal amount of United States notes of 
higher denominations shall be retired and canceled: Pro- 
vQed, however, That the aggregate amount of United 
States notes at any time outstanding shall remain as at 



766. Sec. 4. Amends section 9 of act of 
July 12. 1882. The amended 
section follows section 5167 of 
the Revised Statutes. 



202 ACTS OF GENERAL NATURE. 

present fixed by law: And provided further, That nothing 
in this Act shall be construed as affecting the right of any 
national bank to issue one-third in amount of its circu- 
lating notes of the denomination of five dollars, as now 
provided by law. 

765. Sec. 3.— 

Amends section 5153, Revised Statutes, paragraph 243, ante. 

766. Sec. 4.— 

Amends section 9 of act of July 12, 1882, as amended by act of March 
14, 1900. See paragraph 314, ante. 

PANAMA CANAL BONDS. 

PANAMA CANAL BONDS— ADDITIONAL ISSUE AUTHOR- 
IZED AT RATE OF INTEREST NOT TO EXCEED 3 PER 
CENT PER ANNUM. 

iwfsJ'l^- h '^^'^' ^®°- 39.— That the Secretary of the Treasury is 
Stat. L., 117.' hereby authorized to borrow on the credit of the United 
States, from time to time, as the proceeds may be required 
to defray expenditures on account of the Panama Canal 
and to reimburse the Treasury for such expenditures 
already made and not covered by previous issues of bonds, 
the sum of two hundred and ninety miUion five hundred 
and sixty-nine thousand dollars (which sum together 
with the eighty-four million six hundred and thirty-one 
thousand nine hundred dollars abeady borrowed upon 
issues of two per cent bonds under section eight of the 
Act of June twenty-eight, nineteen hundred and two, 
equals the estimate of the Isthmian Canal Commission 
to cover the entire cost of the Canal from its inception to 
its completion), and to prepare and issue therefor coupon 
or registered bonds of the United States in such form as 
he may prescribe, and in denominations of one hundred 
doUars, five hundred dollars, and one thousand dollars, 
payable fifty years from the date of issue, and bearing 
interest payable quarterly in gold coin at a rate not ex- 
ceeding three per centum per annum; and the bonds 
herein authorized shall be exempt from aU taxes or duties 
of the United States, as weU as from taxation in any form 
by or under State, mimicipal, or local authority: Pro- 
vided, That said bonds may be disposed of by the Secre- 
tary of the Treasury at not less than par, under such 
regulations as he may prescribe, giving to all citizens of 
the United States an equal opportunity to subscribe 
therefor, but no commissions shall be allowed or paid 
thereon; and a sum not exceeding one-tenth of one per 
centum of the amount of the bonds herein authorized is 
hereby appropriated, out of any money in the Treasury 
not otherwise appropriated, to pay the expenses of pre- 
paring, advertising, and issuing the same; and the au- 
thority contained in section eight of the Act of June 
twenty-eight, nineteen hundred and two, for the issue of 
bonds bearing interest at two per centum per annum, is 
hereby repealed. 



ACTS OF GENERAL NATURE. 203 

PANAMA CANAL BONDS ISSUED UNDER ACT OF AUGUST 
5, 1909, NOT RECEIVABLE AS SECURITY FOR THE 
ISSUE OF CIRCULATING NOTES TO NATIONAL BANKS. 

768. Be it enacted hy the Senate and House of Repre- Act Mar. 2^ 
sentatives of the United States of America in Congress stat'. l!,' 1013.' 
assembled, That the Secretary of the Treasury be, and he 

is hereby, authorized to insert in the bonds to be issued 
by him under section thirty-nine of an Act entitled "An 
Act to provide revenue, equahze duties, and encourage 
the industries of the United States, and for other pur- 
poses," approved August fifth, nineteen hundred and 
nine, a provision that such bonds shall not be receivable 
by the Treasurer of the United States as security for 
the issue of circulating notes to national banks; and the 
bonds containing such provision shall not be receivable 
for that purpose. 

CERTIFIED CHECKS WHEN RECEIVABLE FOR DUTIES AND 

TAXES. 

CERTIFIED CHECKS DRAWN ON NATIONAL AND STATE 
BANKS RECEIVABLE FOR DUTIES ON IMPORTS AND 
INTERNAL TAXES. ACT MARCH 2, 1911. 

769. Be it enacted hy the Senate and House of Repre- 
sentatives of the United States of America in Congress 
assembled, That it shall be law'ful for collectors of cus- Act Mar. i. 
toms and of internal revenue to receive for duties on im- stat'. l!,' 965!' 
ports and internal taxes certified checks drawn on na- 
tional and State banks, and trust companies during such 

time and under such regulations as the Secretary of the 
Treasury may prescribe. No person, however, who may 
be indebted to the United States on account of duties on 
imports or internal taxes who shall have tendered a cer- 
tified check or checks as provisional pa}Tnent for such 
duties or taxes, in accordance with the terms of this Act, 
shall be released from the obligation to make ultimate 
payment thereof until such certified check so received has 
been duly paid; and if any such check so received is not 
duly paid by the bank on which it is dra\\-n and so certi- 
fying, the United States shall, in addition to its right to 
exact payment from the party originally indebted there- 
for, have a lien for the amount of such check upon all the 
assets of suc];^ bank; and such amount shall be paid out of 
its assets in preference to any or all other claims whatso- 
ever against said bank, except the necessary costs and ex- 
penses of administration and the reimbursement of the 
United States for the amount expended in the redemption 
of the circulating notes of such bank. 

Sec. 2. That this Act shall be effective on and after 
June first, nineteen hundred and eleven. 

CERTIFIED CHECKS— WHEN RECEIVABLE FOR DUTIES 
AND TAXES. ACT MARCH 3, 1913. 

770. Be it enacted by the Senate and House of Repre- 
sentatives of th4 United States of America in Congress 



204 ACTS OF GENEBAL NATURE. 

igfsf c.^m ij o^semhled, That it shall be lawful for coUecting ofRcers 
Stat, l'., 733.' to receivG certified checks drawn on national and State 
banks and trust companies, during such time and under 
such regulations as the Secretary of the Treasury may 
prescribe, in payment for duties on imports, internal taxes, 
and all public dues, including special customs deposits; 
and the Act of March second, nineteen hundred and 
eleven, entitled "An Act to authorize the receipt of certi- 
fied checks for duties on imports and internal taxes," is 
hereby amended accordingly. 

AMERICAN NATIONAL RED CROSS. 

NATIONAL BANKS AUTHORIZED TO SUBSCRIBE TO 
AMERICAN NATIONAL RED CROSS DURING THE WAR. 

,qAP* ^^y ^' 771. Be it enacted hy the Senate and House of Repre- 
sentatives oj the United States oj America in Congress 
assembled, Tliat during the continuance of the state of 
war now existing it shaU be lawful for any national bank- 
ing association to contribute to the American National 
Red Cross, out of any net profits otherwise available 
under the law for the declaration of dividends, such sum 
or sums as the directors of said association shall deem 
expedient. Each association shall report to the Comp- 
troller of the Currency within ten days after the making 
of any such contribution, the amount of such contribu- 
tion, and the amount of net earnings in excess of such 
contribution. Such report shall be attested by the presi- 
dent or cashier of the association in hke manner as the 
report of the declaration of any dividend. 

Sec 2. That all sums so contributed shall be utilized 
by the American National Red Cross in furnishing vol- 
unteer aid to the sick and wounded of the combatant 
armies, the voluntarv relief of the Army and Navy of the 
United States, and the relief and mitigation of the suffer- 
ing caused by the war to the people of the United States 
and their aUied nations. 



SPECIAL ACTS. 



205 



CHAPTER VIII. 



SPECIAL ACTS RELATING TO NATIONAL BANKS. 



1900. National bank- 
applicable to Porto 



800. Act April 12, 

ing laws 
Rico. 

801. Act April 30, 1900. National bank- 

ing laws applicable to Hawaii. 



802. Granting Fifth-Third National Bank 

of Cincinnati, Ohio, the right to 
use original charter No. 20. 

803. Special acts authorizing change of 

name or location of national 
banks. 



NATIONAL BANKING LAWS APPLICABLE TO PORTO RICO. 
ACT APRIL 12, 1900. 

800. Sec. 14.— That the statutory laws of the United , .*?*.^,?V?'}T' 

~ ,,. . 1-11 I'll" ^^^ 14; 31 btat.L., 

btates not locally inapplicable, except as hereinbefore or sa 
hereinafter otherwise provided, shall have the same force 
and effect in Porto Rico as in the United States, except 
the internal-revenue laws, which, in view of the pro- 
%asions of section 3, shaU not have force and effect in 
Porto Rico. 

Note. — The Attorney General of the United States in an opinion 
rendered June 2, 1900, held "There seems to be in the structure of the 
national banking laws no general provisions which can not be carried 
into force and effect in Porto Rico equally with all of the various States 
and Territories to which the laws were originally applied. I can find 
no reason to hold that the statutes relative to the organization and pow- 
ers of national banks have not, by section 14 of the Porto Rican act, 
above referred to, been extended to that island. The language of that 
section is broad enough, and in my opinion does authorize the organ- 
ization and carrying on of national banks in Porto Rico." 

NATIONAL BANKING LAWS APPLICABLE TO HAWAII. 
ACT APRIL 30, 1900. 



as 



801. Sec. 5. — That the Constitution, and except 
herein otherwise provided, all the laws of the 
States which are not locally inapplicable, shall have the 
same force and effect within the said Territory as else- 
where in the United States: Provided, That sections 
eighteen hundred and fifty and eighteen himdrcd and 
ninety of the Revised Statutes of the United States shall 
not apply to the Territory of Hawaii. 

Note. — The Attorney General of the United States in an opinion 
rendered June 23, 1900, held "That the act of April 30, 1900, * * ♦ 
extended the national banking acta to the Territory of Hawaii, and 
would authorize the Comptroller to grant permission for the organiza- 
tion of national banks therein. (See my opinion of June 2, 1900, rela- 
tive to the same question as applied to Porto Rico.) But I do not think 
that the provisions of section 5154 apply to banks existing in Hawaii 
prior to the passage of the act of April 30, 1900. Sections 5154 and 5155 
seem, by their especial terms, to refer only to banking institutions organ- 
ized under special or general laws of a State, and do not seem to apply at 
all to banks organized under the laws of any Territory. I tliink the 
object of these two sections was to enable the banks that wore previously 
stnctly State institutions to become national corporations, and the 
operation of the act in that respect is to be so restricted." 



Act 



1900 

United stat l., wi 



Apr, 
sec. 5 



80. 
31 



207 



208 SPECIAL ACTS. 

GRANTING FIFTH-THIRD NATIONAL BANK, OF CINCIN- 
NATI, OHIO, THE RIGHT TO USE ORIGINAL CHARTER 
NUMBER TWENTY. 

802. Be it eiuicted hy the Senate and House of Repre- 
sentatives of the United States of America in Congress 
i9w°*37 Stat if' ^semhled, That the Comptroller of the Currency be, and 
13781 "' he is hereby, authorized and directed to issue to the Fifth- 

Third National Bank, of Cincinnati, Ohio, charter num- 
bered twenty in lieu of their present charter numbered 
twenty-seven hundred and ninety-eight, said charter 
numbered twenty being the original charter number of 
the Third National Bank, of Cincinnati, Ohio, which bank, 
was merged and consolidated with the Fifth National 
Bank, of Cincinnati, Ohio, in the year nineteen hundred 
and eight, under the name of the Fifth-Third National 
Bank, of Cincinnati, Ohio, said consolidated bank having 
succeeded to all the assets, good will, rights, privileges, 
and emoluments of the said Third National Bank, of 
Cincinnati, Ohio. 

SPECIAL ACTS AUTHORIZING CHANGE OF NAME OR 
LOCATION. ACT JUNE 7, 1872. 

isra^'S/n \7 803- Sec. 1.— That the First National Bank of An- 
stat. L.,281.' napolis, now located in the city of Annapolis and State 
of Maryland, is hereby authorized to change its location 
to the city of Baltimore, in said State. Whenever the 
stockholders representing three-fourths of the capital 
of said bank, at a meeting called for that purpose, deter- 
mine to make such change, the president and cashier shall 
execute a certificate, under the corporate seal of the bank, 
specifying such determination, and shall cause the same 
to be recorded in the office of the Comptroller of the Cur- 
rency, and thereupon such change of location shall be 
effected, and the operations of discount and deposit of 
said bank shall be carried on in the city of Baltimore. 

Sec. 2. That nothing in this act contained shall be so 

construed as in any manner to release the said bank from 

any liability or affect any action or proceeding in law in 

which the said bank may be a party or interested. And 

when such change shall have been determined upon, as 

aforesaid, notice thereof and of such change shall be 

pubhshed in two weekly papers in the city of Annapolis 

not less than four weeks. 

im^sec^l h ^^^' ^- That whenever the location of said bank shall 

Stat. L., 282. ' havc bccu changed from the city of Annapolis to the city 

of Baltimore, in accordance with the first section of this 

act, its name shall be changed to The Traders' National 

Bank of Baltimore, if the board of directors of said bank 

shall accept the new name by resolution of the board, 

and cause a copy of such resolution, duly authenticated, 

to be filed with the comptroller of the currency. 

i872°*sec'^4* \i ^^^- ^- That all the debts, demands, liabilities, rights, 

Stat. L., 282. privileges, and powers of the First National Bank of 

Annapolis shall devolve upon the Traders' National 



Act June 


7, 


1872, sec. 2; 


17 


Stat. L., 282. 





SPECIAL ACTS. 209 

Bank of Baltimore whenever such change of name is 
effected. 

Sec. 5. That this act shall take effect and be in force ig^^^seJl^s; \i 
from and after its passage. ptat. l.tsz' 

Note. — Acta of a similar nature to the one preceding have been 
enacted by Congress for the following purposes: 

Authorizing The Manufacturers' Isational Bank of New York to 
change its location from the city of New York to the city of Brooklyn. 
(Approved July 27, 1868.) 

Authorizing The City National Bank of New Orleans, Louisiana, to 
change its name to The Germania National Bank of New Orleans 
(Approved March 1, 1869.) 

Authorizing The Second National Bank of Plattsburgh, New York, 
to change its name to The Vilas National Bank of Plattsburgh. 
(Approved March 1, 1869.) 

Authorizing The First National Bank of Delhi, New York, to change 
its location and name to The First National Bank of Port Jervis, New 
York. (Approved May 5, 1870.) 

Authorizing The First National Bank of Fort Smith, Arkansas, to 
change its location and name to the First National Bank of Camden, 
Arkansas. (Approved July 1, 1870.) 

Authorizing the Jersey Shore National Bank, Pennsjivania, to 
change its location and name to The Williamsport National Bank, 
Pennsylvania. (Approved December 22, 1870.) 

Authorizing the Worcester County National Bank of Blackstone, 
Massachusetts, to change its location and name to The Franklin 
National Bank, Massachusetts. (Approved February- 9, 1871.) 

Authorizing The Farmers' National Bank of Fort Edward, New York, 
to change its location and name to The North Granville National Bank, 
New York. (Approved February- 18. 1871.) 

Authorizing The Worthington" National Bank of Cooperstown, New 
York, to change its location and name to The First National Bank of 
Oneonta, New York. (Approved February 27, 1871.) 

Authorizing The Warren National Bank of South Danvers, Massa- 
chusetts, to change its name to The Warren National Bank of Peabody, 
Massachusetts. (Approved March 12, 1872.) 

Authorizing The First National Bank of Seneca. Illinois, to change its 
location and name to The First National Bank of Morris, Illinois. 
(Tw^o acta, approved April 5, 1872, and June 18, 1874.) 

Authorizing The Railroad National Bank of Lowell. Massachusetts, 
to change its location and name to The Railroad National Bank of 
Boston, Massachusetts. (Approved May 31, 1872.) 

Authorizing The National Bank of Lyons, Michigan, to change its 
location and name to The Second National Bank of Ionia, Michigan. 
(Approved December 24, 1872.) 

Authorizing The East Chester National Bank of Mount Vernon, New 
York, to change its location and name to The German National Bank 
of Evans%'ille, Indiana. (Approved January 11, 1873.) 

Authorizing The First National Bank of Newnan, Georgia, to change 
ita location and name to The National Bank of Commerce, Atlanta, 
Georgia. (Approved January- 23, 1873.) 

Authorizing The First National Bank of Watkins, New York, to 
change its location and name to The First National Bank of Penn Van, 
New York. (Approved February 19, 1873.) 

Authorizing The National Bank of Springfield, Missouri, to change 
itfl name to The First National Bank of Springfield Missouri. (Ap- 
proved March 3, 1873.) 

Authorizing The Kansas Valley National Bank of Topeka, Kansas, 
to change ita name to The First National Bank of Topeka, Kansas. 
(Approved March 3, 1873.) 

Authorizing The First National Bank of Saint Anthony, Minnesota, 
to change its location and name to The Merchants' National Bank oi 
MinncapoUe, Minnesota. (Approved January S, 1874.) 

Authorizing The Second National Bank of Havana, Xew York, to 
change its name to The Havana National Bank of Havana, New York. 
(Approved January 9, 1874.) 

164312"— 20 14 



210 SPECIAL ACTS. 

Authorizing The Passaic CouBty National Bank of Patereon, New 
Jersey, to change ita name to The Second National Bank of Patereon, 
New Jereey. (Approved April 15, 1874.) 

Authorizing The Citizens' National Bank of Hagerstown, Maryland, 
to change its location and name to The Citizens' National Bank of 
Washington City, District of Columbia. (Approved May 1, 1874.) 

Authorizing The Irasburg National Bank of Orleans, at Irasburg, 
Vermont, to change its location and name to The Barton National Bank, 
Vermont. (Approved June 3, 1874.) 

Authorizing The Farmers' National Bank of Greensburg, Pennsyl- 
vania, to change its location and name to The Fifth National Bank of 
Pittsburg, Pennsylvania. (Approved June 23, 1874.) 

Authorizing The Citizens' National Bank of Sanbomton, New Hamp- 
shire, to change its name to The Citizens' National Bank of Tilton, New 
Hampshire. (Approved February 19, 1875.) 

Authorizing the Second National Bank of Jamestown, New York, to 
change its name to The City National Bank of Jamestown, New York. 
(Approved March 3, 1875.) 

Authorizing The Second National Bank of Watkins, New York, to 
change its name to The Watkins National Bank, New York. (Ap- 
proved March 3, 1875.) 

Authorizing The Slater National Bank of North Providence, Rhode 
Island, to change its name to The Slater National Bank of Pawtucket, 
Rhode Island. (Approved March 3, 1875.) 

Authorizing The Auburn City National Bank of Auburn, New York, 
to be consolidated with The First National Bank of Aubiun, New York. 
(Approved March 3, 1875.) 

Authorizing The Miners' National Bank of Braidwood, lUinois, to 
change its location and name to The Commercial National Bank of Wil- 
mington, Illinois. (Approved January 31, 1878.) 

Authorizing The Windham National Bank, Windham, Connecticut, 
to change its location to the village of WiUimantic, Connecticut. 
(Approved February 10, 1879.) 

Authorizing the National Bank of Commerce of Cincinnati, Ohio, to 
change its name to The National Lafayette and Bank of Commerce. 
(Approved April 29, 1879.) 

Authorizing the City National Bank of Manchester, New Hampshire, 
to change its name to The Merchants' National Bank of Manchester. 
(Approved June 11, 1880.) 

Authorizing The Blue Hill National Bank of Dorchester, Massachu- 
eetts, to change its location and name to the Blue Hill National Bank of 
Milton, Massachusetts. (Approved January 13, 1881.) 

Authorizing The First National Bank of Meriden, West Meriden, 
Connecticut, to change its name to The First National Bank of Meriden, 
Connecticut. (Approved March 1, 1881.) 

Authorizing The National Mechanics' Banking Association of New 
York, New York, to change its name to Wail Street National Bank. 
(Approved February 14, 1882.) 

Authorizing The Lancaster National Bank of Lancaster, Massachu- 
setts, to change its location and name to The Lancaster National Bank 
of Clinton, Massachusetts. (Approved February 25, 1882.) 

Authorizing the National Bank of Kutztown, Pennsylvania, to 
change its location and name to The Keystone National Bank of 
Reading, Pennsylvania. (Approved June 27, 1882.) 

Joint resolution authorizing The National Bank of Winterset, Iowa, 
to change its name to The First National Bank of Winterset, Iowa. 
(Approved January 18, 1883.) 

Authorizing The Second National Bank of Xenia, Ohio, to increase 
its capital stock. (Approved February 17, 1883.) 

Authorizing The First National Bank of West Greenville, Pennsyl- 
vania, to change its name to The First National Bank of Greenville, 
Pennsylvania. (Approved February 26, 1883.) 

Authorizing The West Waterville National Bank of Oakland, Maine, 
to change its title to The Messalonskee National Bank of Oakland, 
Maine. (Approved April 15, 1884.) 

Authorizing the Hillsborough National Bank, of Hillsboro, Ohio, to 
change its name to The First National Bank of Hillsborough, Ohio. 
(Approved December 18, 1884.) 



SPECIAL ACTS. 211 

Authorizing The Slater National Bank of North Providence, Rhode 
Island, to change ita name. (Approved January 8, 1885.) 

Authorizing tne First National Bank of Omaha, Nebraska, to increase 
its capital stock. (Approved January 10, 1885.) 

Authorizing The National Bank of Bloomington, Illinois, to change 
its name to the First National Bank of Bloomington, Illinois. (Ap- 
proved January 27, 1885.) 

Authorizing The Manufacturers' National Bank of New York to 
change its name to The Manufacturers' National Bank of Brooklyn, 
New York. (Approved February 20, 1885.) 

Authorizing The Commercial National Bank of Chicago, Illinois, to 
increase its capital stock. (Approved February 28, 1885.) 

Authorizing The First National Bank of Lamed, Kansas, to increase 
ita capital stock. (Approved March 3, 1885.) 

Authorizing The First National Bank of Fort Benton, Montana, to 
change its location and name. (Approved December 18, 1890.) 

Authorizing the National Safe Deposit Company of Washington to 
change its title to The National Safe Deposit, Savings and Triwt Com- 
pany of the District of Columbia. (Approved February 18, 1892.) 

Authorizing a national bank of Clucago, Illinois, to establish a 
branch office upon the grounds of the World's Columbian Exposition. 
(Approved May 12, 1892.) 

Authorizing The First National Bank of Sprague, Washington, to 
change Its location and name. (Approved March 20, 1896.) 

Authorizing the Interstate National Bank of Kansas City, Kansas, to 
change its location. (Approved March 2, 1897.) 

Authorizing any bank or trust company located in the State of Mis- 
souri to conduct a banking office on the Louisiana Exposition grounds 
at St. Louis, Mo. (Approved March 3, 1901.) 

Authorizing The American National Bank of Graham, Virginia, to 
change its location and name. (Approved February 15, 1906.) 

Authorizing the National Safe Deposit Savings and Trust Company 
of the District of Columbia to change its title to National Savings and 
Trust Company, (Approved January 31, 1907.) 



212 SPECIAL ACTS. 



OPINIONS OF THE ATTORNEY GENERAL. 



213 



CHAPTER IX. 



OPINIONS OF THE ATTORNEY GENERAL ON GUARANTY LAWS OF OKLA- 
HOMA AND KANSAS, AND ON THE INSURANCE OF BANK DEPOSIfS. 



903. Opinion of Attorney General of 
United States on power of a 
national bank to make a con- 
tract with an insurance com- 
pany by which the company 
insures and guarantees each 
depositor in the bank the full 
payment of his deposit therein. 



900. Opinion of Attorney General of 

United States on Oklahoma 
deposit guaranty law. 

901. Opinion of Attorney General of 

United States on Kansas de- 
posit guaranty law. 

902. Opinion of Attorney General of 

the United States on power of 
a national bank to enter into a 
contract with an insurance com- 
pany guaranteeing the solvency 
of the bank. 

THE OKLAHOMA DEPOSIT GUARANTY LAW. 

900. The Attorney General of the United States, in an 
opinion rendered July 28, 1908, said: 

The business of insuring deposits is a wholly separate business from 
that of banking * * *. A national bank has no power to guarantee 
the obligations of a third party, unless in connection with the sale or 
transfer of its own property and as an incident to the business of the 
bank * * *. 

But a contract guaranteeing the payment by another corporation or 
individual of obligations in nowise connected with the business of the 
bank is entirely ultra \dres. I hold * * * that it is illegal for the 
officers of a national bank to enter into any such agreement as that con- 
templated by section 4 of the Oklahoma statutes, and any willful action 
to this effect on the part of any national bank is sufficient cause for the 
forfeiture of charter. 

THE KANSAS DEPOSIT GUARANTY LAW. 

901. The Attorney General of the United States, in an 
opinion rendered April 6, 1909, said: 

The question of the power of a national bank to avail of the invita- 
tion extended to it by this act involves primarily a consideration of 
the nature of the agreement contemplated by it. Attorney General 
Bonaparte, in an opinion rendered to the Secretary of the Treasury, 
under date of July 28, 1908, considering an act of the Legislature of 
the State of Oklahoma (27 Op. A. G., p. 38), determined that a national 
bank could not lawfully enter into the plan or scheme contemplated 
by that act, because it involved essentially a guaranty to the depositors 
of all State banks in Oklahoma, and other national banks in that State 
which might accept the terms of the law, that their respective depos- 
itors should be paid in full; a contract which he deemed to be clearly 
ultra vires. 

The act now under consideration attempts to avoid this objection 
by limiting the amount for which any bank may become liable, but 
within such limitation the same principle is involved, for to the extent 
of the contribution and liability required by the statute each bank 
becomes liable to creditors of the other banks which are parties to the 
plan. But even if a proper construction of the act would, as contended, 
make it a guaranty by each bank of payments to its own depositors, and 
not a general guaranty within the limits of contribution prescribed by 
the act, of all deposits in all the banks which are parties to the scheine, 
nevertheless I am strongly of the opinion that a national bank is %vith- 
out corporate power to expend its moneys for the purpose of providing 
insurance that its depositors shall be paid in full. It may, of courste, 
insure its own property against loss or destruction; it mav insure itself 
against loss of property through theft or other dishonesty, but the appli- 



215 



216 OPINIONS OF THE ATTORNEY GENERAL. 

cation of its funds for the purpose of securing a collateral guaranty by 
third parties that it will pay in full its debts to its depositors is, it 
appears to me, beyond its corporate power. 

Such contract would fall within the principles asserted in Commer- 
cial National Bank v. Pine (82 Fed., 799), Bowen v. Needles National 
Bank (94 Fed., 925), for if, as is well established, a national bank has no 
power to guarantee the obligation of another, it certainly has no power 
to employ another to guarantee its own obligation to a third person. 

POWER OP NATIONAL BANK TO ENTER INTO A CONTRACT 
WITH AN INSURANCE COMPANY GUARANTEEING THE 
SOLVENCY OF THE BANK. 

902. The Attorney General of the United States, in an 
opinion rendered May 7, 1909, said: 

Replying to yours of the 29th ultimo, in which, at the request of the 
Comptroller of the Currency, you ask for an opinion as to the power of 
a national bank to enter into a contract with an insurance company 
guaranteeing the solvency of the bank, and transmitting to me a form 
of policy which is proposed to be issued by an insurance company pro- 
posed to be organized, I beg to say that, as a general principle, I have 
no doubt that it is entirely within the powers of a national bank to 
contract for the insurance of its assets against loss. The form of the 
proposed policy submitted in your letter is somewhat peculiar. It 
purports to insure to the bank the payment of "a sum of money suffi- 
cient to indemnify the bank for any and all losses suffered by it by 
reason of theft, embezzlement, losses in realizing upon loans and in- 
vestments, shrinkage in value of assets or otherwise, in an amount 
equal to but not exceeding the net excess of its obligations, other than 
by reason of the stock of the bank, over the total aggregate value of the 
assets of the bank thus reduced by such losses; provided that there 
shall be included in the assets of the bank all net sums which have 
been realized by reason of the additional liability of the stockholders 
of the bank." 

Such contract is, in effect, an agreement to pay to the bank any defi- 
ciency in its assets upon ultimate realization necessary to enable it to 
pay all of its liabilities of every kind. The policy is to run for a period 
of three months, but to be renewable thereafter for periods of three 
months each with the consent of the insurance company, and at such 
premiums as the insurance company may fix at least one month before 
the expiration of the then current term of the insurance, the premium 
in every case to be a pereentage of the average indebtedness of the bank 
during the period covered by such renewal, with the provision that, if 
Buch rate snail be in excess of one-sixteenth of 1 per cent upon such 
average indebtedness, then and in such event the insurance company 
shall be liable to account to the bank for the application of such pre- 
mium paid by the bank in excess of one-sixteenth of 1 per cent, ' ' which 
excess shall be applicable only to the payment of actual losses incurred 
by the company by reason of claims under this and similar policies, and 
any excess over such extra claims shall be divided pro rata among the 
banks paying such extra rate of premium as a participation in the prof- 
its during which period such extra rate of premium has been paid." 

It is somewhat uncertain precisely what this paragraph means and 
what its effect may be. It seems to me to be objectionable as com- 
mitting the bank to a profit-sharing feature, which might be contended 
to entail a corresponcung liability for losses; and, as the attorney for 
the promoters of the proposed insurance company informs me that this 
is not regarded as an essential part of the plan, I should advise that it 
had better be eliminated from the policy. 

Another provision contained in the policy subjects the bank to a 
periodical examination by the examiners of the insurance company 
without notice and at such times as the company may elect, one of 
such examinations to be within each period of six months covered by 
the policy and all renewals thereof. This period is probably inadver- 
tently placed at six months, as the policy is proposed to be written for 
periods of three months only. Aside from that, I very much question 
the legality of this clause, or at least its enforceability. Section 5241 
of the Revised Statutes provides that, "No association shall be subject 



OPINIONS OF THE ATTORNEY GENERAJ.. 2] 

to any visitorial powers other than such as are authorized by this title, 
or are vested in the courts of justice." 

WTiile this statute does not prohibit the bank from permitting an 
examination of its books, in my opinion it does operate to prohibit it 
from obligating itself to permit sucn examination; and if the covenant 
to insiire can be considered as in any respect dependent upon thia 
agreement to permit examinations, it might be vitiated by the unlaw- 
ful pro\ision. I should advise that the clause be reframed so as to 
make it clear that the agreement to insure is not dependent upon the 
failure to permit the examination, although it might be stipulated that 
in case, at any time, the examiner of the company should not be 
allowed access to the books of the bank for the purpose of making an 
examination the company should have the option, upon reasonable 
notice, to terminate the contract. 

In my opinion, therefore, it is a matter for the discretion of the 
directors and officers of a bank to determine whether or not they will 
enter into any such contract in any given instance, this discretion to 
be exercised in \dew of the solvency and general financial condition of 
the company making the insurance and the reasonableness of the rate 
of premium; and the form of the policy being modified to conform to 
the foregoing suggestions, I see no legal reason why a bank may not 
enter into it. 

POWER OF A NATIONAL BANK TO MAKE A CONTRACT 
WITH AN INSURANCE COMPANY BY WHICH THE COM- 
PANY INSURES AND GUARANTEES EACH DEPOSITOR 
IN THE BANK THE FULL PAYMENT OF HIS DEPOSIT 
THEREIN. 

903. The Attorney General of the United States, in an 
opinion rendered March 31, 1915, said: 

I have the honor to acknowledge the receipt of your letter of Feb- 
ruary 12, 1915, inclosing letter of the Comptroller of the Currency, 
opinion of the Acting Solicitor of the Treasury, and brief filed with 
the Comptroller on behalf of a guaranty company and certain national 
banks, in which the question is raised as to whether a national bank 
may enter into a contract with a guaranty company under which, in 
consideration of premiums paid by the bank, the company "insures 
and guarantees each depositor in the bank the full pa\Tnent of his de- 
posit therein." You ask my opinion upon this question. 

In my opinion, it is within the power of a national bank to enter into 
such a contract. 

The law confers upon national banks such incidental powers as are 
required to meet all legitimate demands of the banking business, and 
to enable them to conduct their affairs safely and prudently within the 
scope of their charters. Section 5136, Revised Statutes; First National 
Bank v. National Exchange Bank (92 U. S. 122, 127). The power to 
give security for deposits seems to be recognized by section 5153, 
Kevised Statutes, as among these incidental powers. The section last 
mentioned, after pro\iding that all associations created under the act, 
shall, when so designated by the Secretary of the Treasury, be deposi- 
taries, further provides that "The Secretary of the Treasury shall re- 
auire the associations thus designated to give satisfactory security, by 
tne deposit of United States bonds and otherwise, for the safe keeping 
and prompt payment of the public money deposited with them," etc. 
It is believed that this section is more reasonably construed as a recog- 
nition of the existence of the power on the part of national banks to 
give security for deposits than as a grant by implication of authority to 
give security for Government deposits alone. 

The power of banks to give security for deposits or for pa>Tnent of 
their debts has been frequently recognized. It has been held that the 
property of a bank may oe pledged as security for a debt ( United Staffs 
v. Robertson (1831), 5 Pet., 641, 650); that a bond with sureties may be 
given to prevent depositors from withdrawing their accounts {Wylit v. 
Commercxal A: Farmers' Bank (1902), 41 S. E., 504, 509; 63 S. C, 406): 
and that a national bank may give its bond with sureties to secure a 
depoedt of State funds {State of Nebraska v. First National Bank of 
OrUam (1898), 88 Fed., 947, 951). 



218 OPINIONS OF THE ATTORNEY GENERAL. 

The power to contract for guaranteeing or securing depositors arises 
from the nature of the relation existing between the banks and their 
depositors. The relation created between the bank and a depositor by 
the receipt of deposits is that of debtor and creditor. (National Bank 
V. Millard (1869), 10 Wall., 152, 155; Davis v. Elmira Savings Bank 
(1896), 161 U. S., 275, 288.) The power to receive deposits, expressly 
granted to every national bank (sec. 5136, R. S.), is, of course, indis- 
pensible to the conduct of the business of banking; and the extent of 
its exercise is in a degree the measxu'e of the success of the bank. The 
ability of a bank to obtain deposits largely depends upon the confidence 
of depositors, or the belief that their deposits are secure. Loss of such 
confidence on the part of depositors is usually attended with loss and 
inconvenience to them, to the bank, and to the public. The law ac- 
cordingly imposes upon the bank an imperative duty not only to repay 
deposits but to keep them secure. For the protection of depositors, its 
revenues and property are pledged, its stockholders are made subject 
to a double liability, and its directors may be held liable for a viola- 
tion of their duties. 

The means by which depositors are to be protected and secured are 
not expressly limited or restricted by statute. A large discretion is left 
to the officers and directors. They may use such means for the purpose 
as are not prohibited by or inconsistent with the provisions of the law 
and as they may reasonably find to be suitable and proper and not incon- 
sistent with the prudent conduct of the affairs of the bank within the 
scope of its charter. "Whatever protects the depositors," it has been 
said, "protects the bank, because it assures confidence in the bank.'- 
(JVoble State Bank v. Haskell (1908), 22 Okla., 48, 89.) 

A contract of insurance or guaranty, such as described in the ques- 
tion submitted, may afford protection to depositors by securing the per- 
formance of an obligation on the part of the bank which otherwise 
might not be performed. And it is not unreasonable to believe that 
Buch a contract, at the same time, may prove valuable to the bank be- 
caxise of the confidence it may assure. No reason is perceived for pro- 
hibiting a national bank, in the discretion of its directors, from so se- 
curing its depositors, or for denying to the bank such benefits as they 
believe may accrue in the form of increased confidence resulting from 
Buch a contract. 

Opinions of former Attorneys General, dated, respectively, July 28, 
1908 (27 Op., 37), and April 6, 1909 (27 Op., 272), are referred to in the 
inclosures as having been construed by the Comptroller of the Ciirrency 
as holding that national banks are without authority to pay, as part of 
their legitimate expenses, premiums on policies insuring their deposi- 
tors against loss. 

As I view these opinions, the conclusion in neither of them is incon- 
Bifltent with the conclusion reached herein. The opinion of July 28, 
1908, construing the Oklahoma State banking act, determined that a 
national bank could not lawfully participate in the plan contemplated 
by the act for the guarantee of deposits, because it involved essentially 
a guarantee to the depositors of other banks that they should be paid in 
full — a contract which was deemed beyond the powers of the bank to 
make. The opinion of April 6, 1909, held that national banks in the 
State of Kansas could not avail themselves of the bank depositor's 
guaranty law of that State. The inquiry, upon the answer to which 
the decision rests, was whether an acceptance of the provisions of 
the Kansas law "would so control the conduct of the affairs of national 
banks aa to expressly conflict with the laws of the United States. ' ' 

As pointed out in the opinion of the Solicitor of the Treasury, the 
more recent opinion of May 7, 1909 (27 Op., 324), in which the form of 
a policy of insurance guaranteeing the assets of a national bank against 
loss was approved provided certain suggested modifications should be 
made, is more nearly in point on the question now under consideration, 
and is in harmony with the views herein expressed. 

The language employed in the opinions of July 28, 1908, and April 
8, 1909, to the effect that national banks are without power to contract 
for insuring that depositors shall be paid in full, was used in the course 
of argument merely, applied to a question which it was not necessary 
to determine, and may be disregarded so far as inconsistent with this 
opinion. 



INDEX. 



219 



INDEX TO NATIONAL-BANK ACT, ETC. 

llndcx to Federal reserve act, p. 251.1 



A. 

Paragraph. 

Abstract of report of condition to be included in annual report 110 

Abstraction, penalty for 436 

Acceptance of drafts or bills of exchange by member banks of Federal Reserve 

System 206, 207 

Acknowledgment. (See Oath.) 

Acknowledgment of organization certificate 203 

Acting Comptroller of the Currency 103 

Act, the national-bank 200 

Acts: 

Of a general nature, not included in national-bank act, affecting national 

banks 700-770 

Special, authorizing change of name or location of national bank 803 

Additional Deputy Comptroller 104 

Administrator, power of national banks to act as 208 

Administrators, not personally liable 242 

Advertisements (see also Publication, Printing): 

Imitation of circulation in, penalty for 345 

Notice to creditors of insolvent banks 516 

Agency, National Bank Redemption, provisions for 414, 415 

Agent: 

Association as fiscal, of Government 243 

Bonds, examination by 310 

Central reser^-e city 401 

Central resers^e city, additional 401 

Circulation, to witness destruction 339 

Foreign branches of national banks as fiscal, of United States 210 

Insurance, when national bank may act as 209 

Liquidating bank 522 

Reserve 401 407 

Reserve, city, additional central, provisions for 401 

Shareholders, appointment and qualifications of 522 

Shareholders, duties of 522 

Special, to examine bank failing to redeem notes 508 

"Witnessing destruction of circulation by 339 

Aggregate amount of circulation not limited 332 

Aiding misdemeanors of officers 436 

Alaska, reserve requirements, etc., for national banks in 411 

Allotment. (See Shares.) 

Allotment of United States bonds to be purchased by Federal reserve bank 316 

Amendments: 

Proposed, to national -bank act to be made in Comptroller's report 110 

Restriction of, to articles of association 225 

Suggested, to improve sj'stem, to appear in annual report 110 

Amount: 

Of bond of Comptroller of Currency 102 

Of bond of Deputy Comptroller of Currency 103 

Of bonds required to be on deposit 302, 313 

Of capital required 224 

Of circulation obtainable 323 

Of circulation that may be redeemed at one time, minimum 414 

Of dividends that may be declared 429 

Of redemption fund required 414 

Of reserve required to be held by — 

Banks elsewhere than in re.serve city 405 

Central reserve city banks 407 

Country banks 405 

Reserve city banks 406 

221 



222 INDEX TO NATIONAL-BANK ACT, ETC. 

Amount — Continued. paragraph. 

Of tax on circulation 444 

Of United States bonds that may be refunded in one year 316 

Recoverable for usurious interest charges 423 

That national banks may borrow 427 

Annual examination of bonds by association 310 

Annual meeting of shareholders 232 

Annual report of Comptroller of the Currency 110 

Appointment: 

Agent, shareholders 522 

Agent to examine bonds 310 

Agent to witness destruction of circulation 339 

Clerks of Comptroller's office 105 

Committee to examine plates, etc 328 

Committee to witness destruction of circulation 339 

Comptroller 101 

Deputy Comptroller 103 

Directors of associations 204 

Dissenting shareholders, committee of apprisal 219 

Examiners of associations 527 

Officers of associations 204 

Receivers of associations 515, 520 

Shareholders' agent 522 

Special commission for preliminary examinations of associations 320 

Vacancies in board of directors 237 

Appraisal. (See Shares.) 

Appraisal of value of stock to be purchased from shareholders dissenting to ex- 
tension of charter 219 

Approval of Comptroller of Currency required for extension of charter 217 

Approval of request for receiver to buy property 524 

Articles of association: 

Amendment of, for extension of corporate existence 215, 216 

Amendment of, restricted 225 

Converted State bank, execution of, by 245 

Increase of capital stock by amendment of 229 

Proceedings in regard to, and form of 201 

Provisions for elections when not provided for in 238 

Reduction of capital stock , 230 

Assessments: 

For examination 527 

Impairment of capital 430 

Plates, engraving of 220, 414 

Redemption of circulation 3i3 

Repayment of tax 449 

Reports of circulation, failure to make 447, 448 

Reports of condition and earnings and dividends, failure to make 443 

Semiannual duty 446 

Shareholder's personal liability ^4 240 

Tax on unauthorized circulation 708-710 

Transportation of notes 414 

Assessors, shareholders' lists accessible to 439 

Assets: 

Comptroller's annual report to contain statement of national banks 110 

Expense of receiver paid from 519 

Failed bank, may be turned over to agent 522 

Insolvent banks, distribution of 517 

Of consolidated banks 503 

Receiver to collect, etc 515 

Receiver to sell on order of court 515 

Report of condition to contain statement of 440 

Shareholders' agent to distribute 522 

United States has paramount lien on 511 

Assignee, failure to pay installments 227 

Assignment (see also Treasurer United States; Bonds, United States): 

Of assets after insolvency void 529 

Re§:ister of bonds 307 

United States bonds as security for circulation 306 



INDEX TO NATIONAL-BANK ACT, ETC. 223 

Parajrraph. 

Assistant Deputy Comptroller..'. 104 

Assistant Treasurer of United States: 

Circulation of liquidated and insolvent banks, duty of 505 

Circulation, unfit, to be sent to Treasurer for redemption 414 

Fraudulent notes to be marked by 746 

Public moneys to be deposited with 730, 731 

Unauthorized withdrawal of public money from 737 

Associations: 

Defined 300 

National banking, provisions for formation of 201 

Organized under act of 1863 not affected 247 

To be notified of transfer of bonds 308 

To issue gold notes 341 

Assorting charges for redeemed circulation 414 

Attachment, not to issue prior to final judgment of court 529 

Attorney General, opinions of 900-903 

Auction: 

Bonds of expiring associations 221, 504 

Bonds of liquidating associations 221, 504 

Bonds, sale of, when association has failed to pay its circulating notes 511 

Enforcement of assessment, impaired capital 430 

Purchase of property by receiver 523 

Sale of delinquent national-bank stock 430 

Sale of dissenting shareholders' stock 219 

Authority: 

To commence business 320 

To coin aUver dollars 722 



224 INDEX TO NATIONAL-BANK ACT, ETC. 



B. 

Paragraph. 

Bad debts defined 429 

Ballot. (See Elections; Shareholders.) 

Bank balances, net to or from to be used in reserve calculations 410 

Bank circulation. (See Circulation.) 

Bank examiners 527 

Bank examinations 527 

Banking house : 

Association may own 223 

Location 400 

Banking powers (see also Real estate and national banking associations) : 

Corporate 204 

Incidental 204 

Banks not in reserve cities. (See Country banks.) 

Banks other than national, statement to be given in annual report 110 

Bills of exchange: 

Discount of 422 

Illegal transfer of, void .* 529 

Interest on 422 

Member bank of Federal Reserve System may accept 206 

Not considered borrowed money 425 

Penalty for official malfeasance, relative to 436 

Restrictions on loans, not applicable to 425 

Restriction on associations, liability, not applicable to 427 

Transfer of, to create a preference, void 529 

Bimetalism 762 

Board of directors. (See Directors.) 

Bonds, official: 

Comptroller 102 

Deputy Comptroller 103 

Officers of associations 204 

Public depositaries 243 

Receiver 515 

Shareholders' agent 522 

Shareholders', on election of agent 522 

Bonds, others, to secure deposits 243 

Bonds, United States: 

Annual examination of, provided for 310 

Assignment or transfer of, to be countersigned by Comptroller 306 

Association to be notified of transfer or assignment 308 

Cancellation of, forfeited, for circulation redeemed 510 

Circulation issuable on 304, 317, 323 

Circulation obtainable on 304, 317, 323 

Comptroller, access to records of, and deposit with Treasurer 309 

Coupon, to be exchanged for registered 305 

Deficiency in proceeds from sale of, what first lien 511 

Defined 301 

Deposit of, not required to begin business 302 

Depositaries required to deposit 243 

Depreciation in value of, how made good 311 

Exchange of, for Treasury gold notes 318 

Exchange of, permitted 311 

Forfeiture of, for failure to redeem circulation 508 

General provisions respecting 311 

Gold, banks to deposit 341 

Government depositaries, deposit of, required 243 

Increase of deposit of 304 

Interest on, liable for penalty for failure to make reports to Comptroller. . . 443 

Interest on, liable for penalty for failure to make returns and pay taxes .... 425 

Interest on, withheld on impaired capital 430 

Lawful money, deposit of, to retire circulation and withdraw 312 



INDEX TO NATIONAL-BANK ACT, ETC. 225 

Bonds, United States — Continued. Paragraph. 

Liquidating bank, reassignment of 504 

Minimum amount to be deposited 302, 313 

Maximum circulation issuable on 323 

Obligations of the United States, including, defined 739 

Panama Canal, available as security for circulation 303 

Panama Canal, additional issue of, authorized 767 

Panama Canal, authorized by act of August 5, 1909, not receivable as se- 
curity for circulation 768 

Penalty for illegal dealing in counterfeit 746 

Penalty for illegal possession or use of material for printing 741 

Penalty for passing counterfeit 743 

Penalty for taking or possessing unauthorized impressions of tools, etc., 

used in printing 74-5, 746 

Record of transfer or assignment of, to be kept by Comptroller 307 

Reduction of deposit of 304 

Refunding under provisions of Federal reserve act 304 

Refunding of 316, 757 

Registered, to be deposited with Treasurer United States 301, 302 

Relation of, on deposit to capital 304 

Return of, to association 311 

Sale of, at auction for failure to redeem circulation 511 

Sale of, privatsly, at not less than par, for failure to redeem circulation. . 512 

Secretary of Treasury authorized to sell, to make good gold reserve 750 

Taxation, exempt from 716 

Tax on circulation secured by 444 

Tax on circulation seciu-ed by Panama Canal bonds 303, 444 

To secure deposits 243 

Transfer of, how effected 306 

Treasurer of United States to have access to records of Comptroller relative to 309 

Treasurer United States to hold , in trust for association 306 

Withdrawal of, and of circulation 312, 414 

Withdrawal of 304 

Bookkeeper. {See Officers.) 

Books. {See Comptroller; Treasurer United States.) 

Borrowed money {see Liability of association, Loans): 

Limit of amount 427 

To make good gold reserve, by Secretary of Treasury, authorized 750 

Branch banks: 

Chicago Worid 's Fair 803 

Louisiana Exposition 803 

State banks entering system by conversion may retain 246 

Branches, foreign, authorized 210 

Broker, when national bank may act as broker in procuring loans on real estate . 209 

Bureau of Comptroller of Currency 100 

Bureau of Currency, expense of 327 

Bureau of Engraving and Printing, Director of, designated as custodian of 
plates, dies, etc., of Federal reserve and national bank notes 327 

Business: 

Authorization of association to begin, when 226, 319 

Place of 400 

Suspension of, after default to pay circulation 509 

Business paper: 

Discount of 422, 427 

Excepted from limit on loans 425 

By-laws prescribed by directors of national banks 204 

161312°— 20 15 



226 INDEX TO NATIONAL-BANK ACT^ ETC. 



c. 

Paragraph. 

Call for report of condition 440 

Cancellation. {See Bonds, United States, circulation.) 

Cancellation of bonds forfeited 510 

Cancellation of circulation redeemed 514 

Capital stock: 

Agent of shareholders to distribute assets ratably 522 

Amount required 224 

Amount to be paid before association begins basiness 226, 319 

Appointment and qualification of shareholders' agent 522 

Assessment for impairment of 430 

Association to begin business, amount to be paid 226 

Borrowed money must not exceed 427 

Branches of converted State banks " 246 

Certificate of officers and directors required relative to payment of 226, 319 

Circulation not to be used to create increase of 428 

Circulation outstanding not exceeding 5 per cent of, free from taxation 706 

Circulation, proportion to , 304 

Conversion of State banks authorized 245 

Creditors' bill against shareholders 521 

Deposit of United States bonds based on 302 

Directors, individual liability of 526 

Directors, qualification of 233 

Disposition of, delinquent shareholders 227 

Dividends declared on, and net earnings in excess of dividends to be 

reported 442 

Dividends on, and creation of sxirplus 424 

Dividends on, when prohibited 429 

Division of, into shares, and number and value of each 225 

Enforcement of assessment, to make good impairment of 430 

Enforcing individual liabilities of shareholders of, by receiver 520 

Enforcing payment of 227 

Holders of shares of, in expiring associations to be extended or reorganized, 

to have preference in allotment of shares 219 

Holding of shares of, required by directors 233 236 

Impairment of, assessment for 430 

Impairment of, receiver may be appointed for failure to make good 520 

Increase of, provisions for 228, 229, 304 

Individual liability of shareholders 240 

Liability of association not to exceed , except on account of certain demands. 427 

Liquidation, shareholders owning two- thirds of, may vote to go into 500 

List of shareholders of, to be transmitted to the Comptroller 439 

Loans on security of shares, or purchase of, prohibited 426 

Loans restricted to 10 per cent of, including surplus, etc 425 

Minimum amount, required of national banks 224 

Minimum of bonds to 302 

Number of shares and amount of, stated in organization certificate 202 

Of national banks held by converted State banks 245 

Payment of, provisions for 226 

Penalty for failure to make good impairment of 430 

Personal liability of shareholders 240 

Population to govern minimum amount 224 

Purchase of, prohibited 426 

Receiver may be appointed when, impaired 430 

Receiver may be appointed when, not fully paid in 227 

Reduction of, provisions for 230, 304 

Relation of bond deposit to 304 

Restoration of, when below the minimum required 227 

Shareholders of, list to be kept and subject to inspection 439 

Shareholders owning two-thirds of, may place an association in liquidation. . 500 



INDEX TO NATIONAL-BANK ACT, ETC. 227 

Capital Block — Continued. Paragraph. 

Shareholders owning two-thirds of, may change title and location 211 

Shareholders owning two-thirds of, may increase 228, 229 

Shareholders owning two-thirds of, may reduce 230 

Shareholders owning two-thirds of, may extend corporate existence 216 

Shareholders entitled to one vote on each share of, neld by 231 

Shareholders of, converted State banks not liable, when 240 

Shareholders of, not consenting to an extension may withdraw 219 

Shares of, acquired for debt to be disposed of, when 426 

State taxation of shares of 451 

Subscriptions to, when payable 226 

Surplus fund to be created to the amount of 20 per cent of 424 

Transfer of shares 241 

United States registered bonds to be deposited as security for circulation 

to be based on 302 

When increase of, becomes valid 228 

Withdrawal of bonds on reduction of, or closing of business 304 

Withdrawal of bonds, limited 311 

Withdrawal of, prohibited 429 

Cashier (see also President; Officers): 

Appointment of 204 

Bank examiner may examine, on oath 527 

Bond assignment by 306 

Certificate of officers and directors 319 

Certificate of stock payment 226 

Circulating notes, to sign 324, 337 

Election or appointment of 204 

Embezzlement by 436 

Examiner of own bank, can not be 527 

Expiration of corporate existence, certification by 221 

Extension of corporate existence, certification by 216 

False certification of checks 436 

Incomplete circulation, provisions relative to 417 

Increase of stock, certification of 228 

Liquidating bank, duty in 501 

Penalty for — 

Countersigning or delivering circulation improperly 344 

False certification of checks 434, 439 

Issuing circulation of expired associations 747 

Official malfeasance 436 

Pledging, etc., circulation 432 

Unauthorized receipt of public money 738 

Protest of circulation, waiving notice of 507 

Proxy, not to act as 231 

Reports of condition, verified by 440, 441 

Reports of earnings and dividends, verified by 442 

Shareholders, lists of, by 439 

Signature of, forged or wanting, not to invalidate circulation 417 

Taxable circulation, returns by 446 

Unauthorized circulation, returns by 710 

Voluntary liquidation, certified by 501 

Cash reserve required : 

Banks elsewhere than in reserve city 405 

Central reserve city 407 

Reserve city banks 406 

Central reserve agents. (See Agents; Reserve; Reserve agents.) 

Central reserve cities: 

Cash reserve required -lO? 

Number and classification of 'lOl 

Certificate: 

Certified copy of organization, evidence ~W 

Comptroller s, of authority 320 

Converted State banks 245 

Destruction of circulation on retirement account 416 

Destruction of notes 339 

Execution of organization 203 

Extension of corporate existence 217 



228 INDEX TO NATIONAL-BANK ACT, ETC. 

Certificate — Continued. Paragraph. 

Increase of stock valid, when 228 

May be withheld, when 320 

Officers and directors to attest 319 

Of deposit as time deposits 403 

Of payment of stock 226 

Organization, to specify 202 

Payment of installments of stock to be certified 226 

Publication of Comptroller's, of authority 321 

Purchase of property by receiver, required 523 

Reduction of stock valid, when 230 

Sealed, of Couiptroller, evidence 703 

To be made by association, showing bonds deposited with Treasurer 310 

Voluntary liquidation oOl 

Certificates: 

Gold, issue of 433 

Gold 754 

Silver ' 755 

United States, subject to State tax 717 

Certification of checks, when forbidden, penalty for 434, 435 

Certified checks, receivable under certain conditions for duties on imports, 

internal taxes, etc 769, 770 

Certified copies of reports, etc 703. 704 

Change of location, special acts authorizing 803 

Change of title and location 211 

Change of title and location, debts not affected by 212 

Charges for transportation and assorting of circulation for redemption 414 

Charter (see also Corporate existence): 

Certificate of Comptroller authorizing the bank to begin business known as. 320 

Extension of 215 

Forfeiture of. 526 

Issue of, to national banks 320 

Reextension of 222 

Term for which issued 204 

Charter number of Fifth-Third National Bank of Cincinnati, Ohio, changed . . . 802 

Charter number to be printed on circulation 325 

Checks: 

Certified, receivable for duties on imports and internal taxes 769, 770 

False certification of, unlawful 434 

Falsely certified, an obligation of association 434 

Penalty for false certification of 435 

Chicago, 111. , designated as central reserve city 401 

Cincinnati, Ohio, change of charter number of Fifth-Third National Bank 802 

Circulation: 

Aggregate amount not limited 332 

Amount of, obtainable 323 

Amount of, obtainable by gold banks 341 

Association may issue 204 

Association to receive interest on bonds as long as, honored 311 

Associations consolidating, deposit of lawful money to retire, unnecessary. 503 

Associations to redeem, in lawful money on demand 401 

Banks other than national, tax on 708-710 

Bonds in excess of amount required may be withdrawn 304 

Bonds forfeited when, dishonored 508 

Bonds having been forfeited 508 

Bonds, United States, to secure 302 

Capital not to be reduced below amount of outstanding 230 

Cancellation of redeemed 514 

Certificates of destruction, by whom executed 339 

Charter number on 325 

Collection of tax on 448 

Consolidating banks 503 

Cost of plates to be paid by association 414 

Counterfeiting, etc 344, 346, 740, 741, 747 

Countersigning unlawfully 344 

Denominations, minimum 329 

Deposit of lawiul money to withdraw 314 



INDEX TO NATIONAL-BANK ACT, ETC. 229 

Circulation — Continued. Paragraph 

Deposit of United States bonds to secure 302 

Deposit of bonds to be increased when capital is increased 304 

Destroyed, to be replaced by an equal amount of new notes 414 

Disposition of redemption account balances 416 

Enforcins; payment of tax on 448 

Examination of bank upon request of, by a2;ent of Comptroller 508 

Expense of plates for new notes of extended banks 220 

Expenses of redemption, how paid 414 

Expired associations, penalty for issuing 747 

Extended bank, shall differ "from prior issue 220 

Failed banks, redemption of 505 

Failure to redeem 507 

Federal reserve banks 317 

For what, is receivable 337 

Fraudulent notes to be so stamped 748 

Gain from lost and destroyed 220 

Gold banks, amount not limited 342 

Gold bank, to be redeemed in gold coin 341 

Government depositaries to receive, at par 243 

Imitation of, prohibited 345 

Increasing capital stock, use of, prohibited 428 

Inscription on 324, 341 

Lawful money deposit to retire circulation limited 314 

Limit on aggregate amount of 323 

Liquidating banks, redemption of 505 

Liquidating bank to deposit lawful money to redeem 504 

Maceration of ". 339, 340 

Minimum amount that may be withdrawn 312 

Minimum denominations 329 

Minimum deposit of bonds required 302 

Mutilation of, prohibited 346 

Not considered borrowed money 427 

Notice of redemption of, to be forwarded to bank 414 

Notice to present, for redemption when bonds have been forfeited 510 

Of converted State bank, where redeemable 246 

Other, prohibited for national bank 338 

Panama Canal bonds to secure 303 

Paper for printing 326 

Penalty for engraving, etc., without authority 742 

Penalty for failure to make return of, taxable 447 

Place for redemption of 414 

Plates and dies for printing of 327 

Plates and dies to be engraved for 324 

Pledging, as security prohibited 428 

Profit on unredeemed, inures to the United States 220 

Proceedings when return is not made 712 

Prohibition against circulating uncurrent notes 431 

Proportion to bonds deposited 323 

Proportion to capital 302 

Protest of 507 

Receivable at par by all national banks 425 

Receivable for what 337 

Redeemed, to be canceled 514 

Redemption fund 414 

Redemption of, closed banks 505, 506 

Redemption of, extended banks 220 

Redemption of, incomplete 417 

Redemption of, in United States notes 414 

Redemption of, liauidating banks 505, 506 

Redemption recoras 513 

Reduction or retirement of 313 

Refunding excess tax 449 

Register of Treasury's signature to be on 324 

Reserve not determined by 402 

Reserve not to be kept on 402 

Reserve requirement repealed 402 



280 IXDEX TO NATIONAL-BANK ACT, ETC. 

Circulation — Continued. Paragraph. 

Restriction of tax pro\'isions 714 

Restriction on notes less than SI 718 

Restriction on notes less than $5 329 

Restriction on notes of $5 323 

Retirement account 416 

Retirement of 314, 315 

Retiring, under provisions of Federal reserve act 304 

Semiannual return of, subject to tax 446. 711 

Signing 324, 337, 417 

Statement concerning, of closed banks to appear in annual report of Comp- 
troller 110 

Tax on 444 

Tax on converted bank 713 

Tax on, insolvent banks remitted 451, 715 

Tax on, secured by Panama Canal bonds 303 

Tax on, State bank issue 705, 712 

Tax on, subject to State law 717 

Treasurers and public depositaries to return all, of closed banks 505 

When exempt from tax ^ 706 

When issuable 337 

Withdrawal of, by depositing lawful money, limitation of 312, 314, 414 

Worn or mutilated, to be redeemed 414 

Worn out or mutilated, destroyed 339, 340 

Citizens' national banking associations, where 214 

Claims (see Insolvency: Receiver), notice to present, against insolvent banks. . 516 

Classification of central reserve cities 401 

Clearing house, receipt in settlement of balances of gold and silver certificates 

bv 433 

Clerks: 

Appointment and qualification of, by the Secretary 105 

Clerical force for the redemption of circulating notes 415 

Duties of, fixed by the Comptroller 105 

Employment of, for the bureau, by the Comptroller 105 

Names and compensation of, in annual report and Official Register 110, 111 

Of banks can not act as proxy 231 

Closed associations {see Insolvency), statement to appear in annual report 110 

Coin (see Gold : Silver), right to redeem circulation in 414 

Coins, Philippine Islands, legal tender 719 

Collection of penalty for failure to make semiannual return of circulation 446 

Collection of tax on circulation, enforcement of 448 

Commencement of business, provisions to be complied with, prior to 319 

Commercial paper: 

Discount of 422, 427 

Excepted from limit on loans 425 

Commission, not to be paid officer, director or employee of member bank 438c 

Commissioner of Internal Revenue, tax on circulation of insolvent banks to be 

remitted by 715 

Commissioner of Internal Revenue, returns of circulation other than national, 

to be made to 711,712 

Committee: 

Of appraisal 219 

Of destruction, pro\'isions for 339 

Compounding debts of insolvent national banks 515 

Comptroller of Currency: 

Action as to agent of shareholders 522 

Agent, special, to be appointed for association failing to redeem circulation . 50S 

Annual report to be made to Congress by 110 

Appointment, term, and salary of 101 

Approval required for extension of charter 217 

Approve receiver 's purchase of property 524 , 525 

Approve reserve agent 40i 

Articlefl of association and organization certificate of national banks to be 

filed with 201, 202 

Assessment of tax on circulation when bank fails to make return 447 

Bond of 102 

Bonds and records ot, with Treasurer, access to 309 



INDEX TO NATIONAL-BANK AOT, ETC. 231 

Comptroller of Currency — Continued. Paragraph. 

Bonds, sale of, privately or at public auction, by 511, 512 

Bond transfers to be recorded by 307 

Capital stock, increase or reduction of, to be approved by 228, 229, 230 

Certificate to begin business 320 

Certificates of destruction of circulation on retirement account 416 

Certified copy of organization certificate, evidence 704 

Charter number of bank, to be put on circulating notes 1 )y 325 

Circulation — 

Of extended banks to be destroyed 1 )y 220 

Plates and dies to be engraved bv order of 324 

To be issued by * 323 

Worn, mutilated, destruction of 339, 340 

Cited in injunction of receiver 518 

Clerks 105 

Creditors of failed banks, dividends to be paid to, by 517 

Distribution of annual report of 112, 113 

Duties of 100 

Enforce stockholders' liability 240 

Engraving of plates for printing of circulation to be ordered by 324 

Enjoined by bank, how 518 

E\adence, sealed certificates 703 

Examiners, appointed by 527 

Examiners' salary', recommended by 527 

Examiners' reports to 527 

Exchange of bonds to secure circulation 311 

Expense of examinations assessed by 527 

Expense of bureau 327 

Extension of corporate existence, approval of, by 215 

Federal Reserve Board, ex officio member of 101 

Fine for failure to make reports to 443 

Forfeit, cancel, or sell bonds for default in payment of notes 512 

Forfeiture of charter, suit to be brought by 526 

Impairment of capital, action to be taken by 430 

Interest in banks, prohibited 106 

Jurisdiction of district court to enjoin 701 

Liquidation of associations, to be notified of 501 

List of shareholders, copy to be sent to 439 

National bank examiners appointed by 527 

Notice to banks short in reserve 402 

Notice to creditors of insohent banks 516 

Notice to present circulation for redem])iion when bonds have been for- 
feited 510 

Oath of directors to be filed with 236 

Oath to l)e taken and Iwnd to be given by 102 

Organization certificate to be filed with 203 

Payment of ca])ital to he certified to 226 

Plates and dies, examination of 328 

Printing annual re])ort of 112, 113 

Proceedings to enjoin 701, 702 

Qualification of 102 

Reappraisal of value of stock of shareholders by 219 

Receivers appointed 1 )y 402, 515, 620 

Reports of banks, other than national, to be obtained and published, by. . 110 

Reports to be made to 440,441 

Report to be made annually to Congress 1 10 

Rooms, etc 1 '^8 

Salar^' of 101 

Seal of 107 

Shareholders' agent, action as to ^22 

State banks converted, approved by 245 

Term of 101 

Title and location, change of, to be approved l>y 211 

Title of national banks subject to approval of 202 

Transfer and assignment of bonds to be con ntersignod 1 'y 306 

To determine if association can commence business 319 

Withdrawal of circulation to have consent of 314 



232 INDEX TO NATIONAL-BANK ACT, ETC. 

Paragraph. 
Comptroller of Treasury, refunding of excess payment of tax on circulation to 

be approved by 449 

Condition, report of 440 

Congress: 

Comptroller's annual report to be made to 110, 111 

Visitatorial powers of 527 

Consent of two-thirds necessary for extension of charter 216 

Consolidation of national banks, provisions for 503, 503a 

Contract insuring or guaranteeing deposits by national banks 903 

Contracts, power for association to make 204 

Contributions, political, prohibited 437 

Conversion of national gold banks into currency banks 343 

Conversion, State banks 245 

Corporate existence: 

Expiration of 221 

Extension of 215-217 

Reextension of 222 

Term of 204 

Corporate powers. (See Powers.) 

Corporate seal, power to adopt and use 204 

Corporation {see also Liability of associations), association becomes, when 204 

Coporations, interlocking directorates forbidden 234, 235 

Cost. {See Expense.) 

Cost of plates 220, 414 

Counterfeits {see Fraudulent notes, etc.) 748 

Counterfeiting, making or using notes, plates, tools, etc 740, 748 

Counterfeiting, plates and dies, to be guarded against 324 

Countrj' banks: 

Caeh reserve required 405 

Distribution of reserve 405 

Reserve required to be held with Federal reserve bank 405 

Reserve requirements for 405 

Reserve that may be held with bank in reserve or central reserve cities... 405 

Coupon bonds, to be exchanged for registered = 305 

Courts. {See Crimes, jurisdiction, etc.) 
Creditors: 

Bill in equity by, against shareholders 521 

Checks falsely certified a valid obligation of association 436 

Directors' liability 526 

Expiration of existence, notice to 221 

Insolvency, notice of , to 516 

Nonpayment of circulation, notice of, to 510 

Payment of assets of failed banks 517 

Preference of, illegal 529 

Rights not to be impaired 529 

Shareholders, list of, subject to inspection by 439 

Shareholders, personal liability of, to 240 

Voluntarj^ liquidation, notice of , to 501 

Creditor's bills; against shareholders 521 

Crimes, jurisdiction, etc.: 

Abstraction of money, funds, etc 436 

Aiders and abettors 436 

Counterfeiting circulation, etc 740, 744 

Dealing in counterfeit circulation 746 

Embezzlement 436,732,737,738 

Enjoining of Comptroller and receiver 518 

Evidence, certified copy of organization certificate 704 

Evidence, sealed certificate of Comptroller competent 703 

False certification of checks 434, 435 

False entries 436 

Forging or counterfeiting United States securities 740 

Having or taking unauthorized impressions of tools, etc 744, 745 

Illegal possession or use of material for circulation 742 

Imitating circulation for advertising purposes 345 

Improper countersigning or delivering circulation 344 

Interlocking directorates forbidden 235 



INDEX TO NATIONAL-BANK ACT, ETC. 233 

Crimes, jurisdiction, etc. — Continued. Paragraph. 

Issuing circulation without authority 436 

Issuing circulation of expired associations 747 

Jurisdiction, general, of national-bank cases 214, 218 

Jurisdiction to enjoin Comptroller or receiver 701 

Misapplication, willful 436 

Mutilating circulation 346 

Obligations of the United States defined 739 

Official malfeasance 436 

Passing counterfeit circulation 743 

Pledging United States notes or bank circulation 432 

Political contributions 437 

Suits in which United States or its officers are parties 700 

Taking unauthorized impression of tools, etc 744 

Violation of national-bank act 526 

Currency. {See Circulation; Gold; Gold certificates; Silver; Silver certifi- 
cates; Lawful money; United States note certificates; Federal reserve notes.) 

Currency Bureau: 

Designation of Office of Comptroller of Currency 100 

Expense of 327 

Expense of, in liquidating failed banks Ill 

Offices, vaults, etc., for 108 

Submission of list of employees 110, 111 

Custodian of plates and dies, etc., for Federal reserve and national-bank notes. . 327 



234 INDEX TO NATIONAL-BANK ACT, ETO. 



D. 

Paragraph 

Date of election of directora 238 

Date upon which an association becomes a body corporate 204 

Date when application for extension of charter may be made 215 

Dates for payment of tax on circulation 303 

Dealing in counterfeit circulation, penalty for 746 

Debts, compounding of: 

Not affected by change of title or location. : 212 

Real estate held for 223 

Declaration of dividends 428 

Default in payment of circulation 507, 509 

Deficiency. {See Bonds; Capital; Circulation; Receiver; Reserve.) 
Definitions: 

Bad debta 429 

Central reserve cities 401 

Demand and time deposits 403 

Of national banking associations and associations 300 

Of United States bonds 301 

Reserve cities 402 

Delinquent shai"eholders, sale of stock of 430 

Delivery of circulating notes 323 

Demand deposits defined 403 

Demands for which'national-bank notes are receivable 337 

D enominations : 

Circulation of gold banks 341 

CiiTulation of national banks 324 

Converted Ptate-bank shares 245 

Gold certificates 433, 754 

Panama Canal bonds 767 

Shares of national-bank stock 225, 245 

Silver certificates 755 

Treasury notes 764 

Depositaries of public moneys 243, 244 

Depositaries of the United States, circulation of liquidating and insolvent 

banks, duty of, to return 505 

Deposit guaranty law: 

Kansas 901 

Oklahoma. . . 900 

Deposit not required in consolidation 503 

Deposit of United States bonds not required 302 

Deposit of lawful money: 

For circulation of extending banks 220 

To redeem circulation of liquidating banks 502 

To withdraw circulation 311 

Deposits: 

Insolvent banks, deposit of funds of 515 

Insurance or guaranty of, by national banks 903 

Not considered borrowed money 427 

Public money 243, 244, 730 

Postmasters' 731 

Reserve to be kept on 405, 407, 414, 744 

Reserve determined by 402, 410 

To redeem circulation, disposition of 416 

United States, no reserve required to be held against 413 

Various kinds defined 403 

With nonmember banks limited 408 

Depreciation {see Bonds; Circulation) in value of bonds to secure circulation. . 311 
Deputy Comptroller of Currency: 

Additional, bond of 104 

Appointed by Secretary of the Treasury 103, 104 

Appointment 103 



INDEX TO NATIONAL-BANK ACT, ETC. 235 

Deputy Comptroller of Currency — Continued. Paragraph. 

Bond 103 

Duties 103 

Interest in bank prohibited 106 

Oath to be taken 103 

Salary of 103 

Deputy comptroller, additional: 

Bond of 104 

Powers of 104 

Salary of 104 

Description of national-bank notes 324 

Designation of central reserve cities 401 

Destruction committee provided for 339 

Destruction of circulation of extended banks 220 

Destruction of worn out and mutilated notes 339, 340 

Dies. {See Plates.) 

Director of Bureau of Engraving and Printing designated as custodian of dies, 

plates, etc., of Federal reserve and national-bank notes 327 

Directors: 

Appointment or election of 204 

Assessment for impairment of capital, provisions for enforcement of 430 

Attestation of reports to Comptroller by 440 

Capital impaired, duties in 227 

Certificate of officers and 319 

Certification of, to extension 216 

Conversion of State banks, action by 245 

Dividends, declaration of , by 428 

Duties of 204 

Election of 204 

Election postponed 238 

Embezzlement , penalty 436 

Enforcing payment of capital 227 

Failure to hold annual election 23(S 

Forfeiture of charter for violation, etc., by 526 

Interlocking, prohibited 234 

Liquidated bank, duties in 501 

Liability of 526 

Names and residences of, to be ascertained by Comptroller 319 

Not to be appointed by the Comptroller to examine own bank 527 

Number and election of 232 

Number, constituting board of 232 

Oath of 236 

Penalty for issuing circulation of expired association 747 

Penalty for official malfeasance 436 

Penalty for political contributions 437 

Penalty for unauthorized receipt of public monev 738 

President '. 239 

President of board to be a 239 

Powers of 204 

Provisions for 232 

Proxy can not act as 231 

Purchase of securities from or sale to director 438d 

Qualifications of 233 

Rate of interest paid directors 43Se 

Restrictions as to interlocking 234 

Sale of stock acquired from delinquent shareholdera 227 

Shareholders dissenting to extension to give notice, etc 219 

Term of 232 

Three-fourt hs to be resident of State 233 

Vacancies in board of 237 

Disbursing funds of United States officers, depositing with national-bank 

depositaries 730 

Disbursing officers, penalty for unauthorized deposit of public money, by 737 

Discount. (See Loans; Liability of association; Interest.) 

Dismissal of officers 20-1 

Disposal of redeemed circulating notes 513 

Disposition of assets of insolvent banks ^17 



236 INDEX TO NATIONAL-BANK ACT, ETC. 

Paragrapli, 

Disposition of earnings, by United States, from Federal reserve banks 750 

Disposition of redemption account 416 

Dissenting shareholders, withdrawal of, on extension 219 

Dissolution {see Expiration of corporate existence; Forfeiture; Insolvency; 

Liquidation) of banks not extending period of succession 221 

Distinctive paper: 

National-bank circulation, etc., to be printed on 326 

Unauthorized possession or use of 742 

Distribution of assets by shareholders' agent 522 

Distribution of reserve: 

Banks elsewhere than in reserve cities 405 

Central reserve cities, banks in __ 407 

Reserve cities, banks in 406 

District attorney, suita in which United States or its officers are parties, to be 

conducted by : 700 

District court, jurisdiction of, to enjoin Comptroller 701 

Dividends: 

Comptroller to make ratable, of assets of insolvent banks 517 

Directors may declare, when 424 

Earnings and, to be reported 442 

Not to be paid by certain converted State banks when surplus is impaired . . 240 

Penalty for failure to report earnings and 4^3 

Prohibited when reserve is short 409 

Restriction on association's liability 427 

Unearned, prohibited 429 

Unpaid, not considered borrowed money 427 

Divisions of Issue and Redemption established in office of United States Treas- 
urer 752 

Drafts: 

Against deposits not considered borrowed money 427 

Liability of association, relative to 427 

Member banks of Federal Reserve System may accept 206 

Obligations of United States, including 739 

Official malfeasance 436 

Penalty for mutilating 346 

Dues. {See Tax; Duties.) 

Duties: 

Associations organized under the act of February 25, 1863 247 

Circulation — 

Converted State banks 713 

Enforcing payment of , on 448 

Exempt from" 706 

Not receivable for customs 337 

Refunding excess on 449 

Restrictions on 714 

Semiannual on 444, 447 

Unauthorized 705, 710 

Comptroller's 100 

Deputy Comptroller's 103 

Directors' 204, 232, 236 

Disbursing officers' 730 

Examiners' 527 

Gold certificates receivable for 754 

Imports and internal taxes may be paid by certified check 769, 770 

Officers' 204 

On imports, certified checks receivable for, under certain conditions 770 

PubUc depositaries, designation and 243 

Receiver, appointment and 515 

Shareholders ' agent 522 

Duty of Treaijurer i* regard to circulation of liquidating and insolvent banks. 505 



INDEX TO NATIONAL-BANK ACT, ETC. 237 



E. 

Paragraph. 

Earnings and dividends to be reported 442 

Earnings by United States from Federal reserve banks, disposition of 750 

Election of president of the board 239 

Election or appointment of directors, appointment officers 204, 232 

Elections: 

Change of title or location 211 

Corporate powers 204 

Extension of corporate existence 7 215 

Failure to hold annual 238 

Failure to hold at appointed time 238 

Increase of stock 229 

Number of directors 232 

Oath of directors 236 

Qualifications of directors 233 

Qualifications of shareholders 231 

Reduction of stock 230 

Shareholders' a^ent 522 

Voluntary liquidation 500 

Embezzlement, misapplication of funds, etc.: 

Money-order funds 732 

Penalty for 436 

Unauthorized deposit of public money by disbursing officer 737, 738 

Employees and expenses 110, 327 

Employees, rate of interest paid 438e 

Enforcing payment of capital stock, provisions for 227 

Enforcing payment of tax on circulation 448 

Enforcement of act in reference to interlocking directorates 235 

Engra\'ing. (See Circulation; Plates and dies.) 

Enjoining Comptroller or receiver from further proceedings 518 

Equity, bills in, against shareholders 521 

Estates, liability of, as shareholders 242 

Estimate of reserve requirements 410 

Evidence. 703, 704 

Examination of organization proceedings preliminary to granting authority to 

begin business 319 , 

Examinations: 

Annual, of bonds 310 

Ascertainment of value of stock of dissenting shareholders 219 

Assessment for 527 

Bonds and records, provisions for 309 

Compensation of examiners 527 

Examiners to make 527 

Expense of 527 

Federal reserve banks 527 

Foreign branches of national banks 210 

Limitation of visitatorial powers 528 

List of shareholders subject to 439 

Member banks 527 

National banks 527 

Number to be made 527 

Plates and dies, annually 328 

Preliminary, to begin business 319 

Preliminary, expense of 519 

Qualification of examiners 527 

Special, of extended associations 217 

State banks and trust companies i>27 



238 INDEX TO NATIONAL-BANK ACT, ETC. 

Examiners: Paragraph. 

Appointment of 527 

Member bank not to make loan or grant any gratuity to 438a 

Not to perform any service for compensation for any bank or officer 438b 

Not to disclose name of borrowers or collateral without first obtaining 

written consent of the Comptroller 438b 

Powers of 527 

Qualifications of 527 

Reports of 527 

Salaries of 527 

Special commission 320 

Exceptions: 

Associations organized under the act of 1863 319 

Converted State bank may continue to hold stock of other national banks.. 245 

Converted State banks may retain branches 246 

Converted State banks, par value of stock 245 

Indebtedness of national banks, restriction on 427 

Insolvent national banks not required to pay tax 450 

Tax on obligations of United States 716 

Tax on circulation secured by Panama Canal bonds 303 

To limit on amount of loans 425 

To restriction on amount of borrowed money 427 

Excessive loans 425 

Excess payment of tax on circulation, refunding of 449 

Exchange, bills of, member banks of the Federal Reserve System may accept. . . 206 

Exchange of bonds 323 

Exchange of bonds to secure circulation 311 

Exchange of certain United States bonds for Treasury gold notes by Federal 

reserve banks 318 

Exchange of coupon for registered bonds 305 

Execution. {See Suit.) 

Executor, power of national bank to act as 208 

Executors, not personally liable 242 

Existence: 

Expiration of 221 

Extension of 215 

Reextension of 222 

Term of corporate, of national banks 204 

Expenditures on account of Panama Canal 767 

Expenses: 

Bureau of the Currency 327 

Bureau, to be stated in Comptroller's annual report 110, 111 

Circulation, redemption of 414 

Circulation, transportation and redemption of retired 313 

Duties of shareholders' agent relative to 522 

Examinations 527 

Examinations, dissenting shareholders 219 

Examinations, special 217 

Examiners 527 

Liquidation of failed national banks Ill 

Of examinations 527 

Plates, cost of 220, 414 

Plates and dies, examination of 328 

Reappraisal for dissenting shareholders 219 

Receivership, how paid 519 

Receivership, paid prior to election of shareholders' agent 522 

Sale of bonds 511 

Sale of delinquent stock 227 

Expiration of charter 221 

Expired associations, penalty for issiung circulation of 747 

Extension of charter 215 

Extension of charter, provisiona for redemption of circulation 220 



INDEX TO NATIONAL-BANK ACT, ETC. 239 



F. 

Failed national banks: Paragraph. 

Redemption of circulation 505 

Report of expenses Ill 

Faihire {see Insolvency): 

Of shareholder to pay installments 227 

To hold election at appointed time 238 

To make reports to Comptroller 443 

To make return on circulation other than national 712 

To pav up capital, assessment for 430 

To redeem circulation 507 

To redeem circulation of extended banks 220 

False entry, penalty for, official malfeasance 436 

Falsely certifying checks 434 

Penalty for 435 

Farm lands, loans on 205 

Federal reserve agent: 

Information concerning member banks to be famished Federal Reserve 

Board by 527 

Special examination of member banks to be approved by 527 

Federal resers^e banks: 

• Circulation may be issued to 317 

Examination of 527 

Examinations of, by Federal Reserve Board 440 

Fiscal agents of IJnited States 6i5 

Government depositaries 615 

Government deposits in 244 

Reserve required to be held with, by banks elsewhere than in reserve 

cities 405 

Reserve required to be held by reserve city banks 406 

Reserve required to be held by central reserve city banks 407 

Reserve, withdrawal of, by member banks 409 

Special examination of member banks may be ordered by 527 

Statements and reports by 440 

Treasury gold notes may be obtained in exchange for certain United States 

bonds 318 

United States bonds, purchase of, by 316 

Federal Reserve Board: 

Approval required for exchange of United States bonds for Treasury gold 

notes 318 

Central reserve cities may be changed or added to, by 401 

Comptroller of the Currency ex officio member of 101 

Examination of Federal reserve banks ordered by 527 

Examiners' salaries fixed by 527 

Federal reserve banks may be required to purchase United States bond? by . 316 
Federal reserve notes to be issued by Comptroller of Currency under the 

supervision of 100 

Information concerning member banks to be furnished by Federal reserve 

agents 527 

Interlocking directorate act as to banks and trust companies to be enforced 

by 235 

Issue of Federal reserve notes under supervision of 100 

May change or add to central reserve cities 401 

Permission for member bank to secure discounts for nonmember banks may 

be granted by 408 

Reduction of capital to be approved by 230 

Reserve cities may be changed or added to by 401 

Reserve withdrawals under regulations by -10!) 

Special examination of member l^anks to be approved by 527 

Statement? and reports from Federal reserve banks and member banks may 

be reouired bv 440 



240 INDEX TO NATIONAL-BANK ACT, ETC. 

Federal reserve notes: Paragraph. 

Comptroller of Cunency to issue, under supervision of Federal Reserve 

Board 100 

Execution of laws relating to 100 

I ssue of 317 

Federal Trade Commission, enforcement of part of interlocking directorate act 

by 235 

Fees {see Examiners; Receivers), protesting circulation 519 

Fees not to be paid officers, directors, or employees of member bank 438 

Piftb-Third National Bank, Cincinnati, Ohio, charter number changed 802 

Filling vacancies 237 

Fine. {See Penalty.) 

Firm. {See Liability of association.) 

First lien, United States has, on all assets 511 

Fiscal agents {see Agent; Government depositaries). Federal reserve banks as.. 615 

Five per cent redemption fund 414 

Not counted as reserve 412 

Foreign branches, national banks may establish 210 

Foreign coins not legal tender 719 

Issue of certificates on gold 754 

Forfeiture of bonds when association refuses to redeem circulation 508 

Forfeiture of charter, suit to be brought for, by Comptroller of the Currency 526 

Forged signatures on bank notes not to prevent redemption of 417 

Forgery of United States securities 740 

Formation of national banking associations 201 

Form of report of condition 440 

Franchise, forfeiture of 526 

Fraudulent notes. United States and national-bank officers to mark 748 

Furniture for Currency Bureau 108 



INDEX TO NATIONAL-BANK ACT, ETO. 241 



G. 

Paragraph. 

Gain from failure to redeem circulation of extended banks 220 

General fund of United States may be deposited in Federal reserve banks. . . . 615 

Gifts, not to be made to officer, director, or employee of member bank 438 

Gold: 

Banks not required to take circulation of other banks at par 421 

Certificates not to be issued when reserve of gold coin and bullion is depleted . 754 

Certificates, when part of national-bank reserve 433 

Circulation of gold banks redeemable in 341 

Deposit of, for certificates 433, 754 

Dollar, standard unit of value 749 

Issue of certificates of deposit of 433, 754 

Organization of gold banks 341 

Reserve of one hundred and fifty millions 750 

Reserve of gold banks to be silver and 342 

Taxation of, gold certificates, etc., by State 717 

Gold banks: 

Circulation of, issuable 341 

Conversion of 343 

Deposit of bonds by 341 

Exempted from provisions relative to other bank circulation 421 

Organization of 341 

Reserve required for 342, 401 

Tax on circulation 444 

Gold bank notes 341 

Gold certificates: 

Deposit of gold for _. 729, 754 

Deposit of foreign gold coin for 754 

Issue of, prohibited, when 729 

Minimum denominations 729, 754 

Payable to order 754 

Receivable for 433,719,754 

Gold coins: 

Foreign, not legal tender 719 

United States, legal tender 720 

United States, legal tender in Philippine Islands 719 

Gold notes, issue of, in exchange for certain United States bonds 318 

Gold reserve in Treasury, gold certificates not to be issued when depleted 754 

Government deposits 615 

Government depositaries: 

Deposit and withdrawal of public moneys 730 

Deposits by certain postmasters 731 

Designation and duties of 243 

Federal reserve bank as 244 

National banks as 243 

National-bank circulation to be received by 243 

National banks as financial agents of the Government 243 

Penalty for misapplication of money-order funds 732 

Penalty for unauthorized deposit of public moneys 737 

Penalty for unauthorized receipt or use of public moneys 738 

Reserves on. (See Federal Reserve act, pur. G19.) 

Secretary of the Treasury to designate 243 

Securities to be deposited by 243 

Government's funds to be deposited, where *>15 

Gratuity — Bank not to grant gratuity to any national-bank examiner 4:'^8a 

Guaranty law : 

Kansas 301 

Oklahoma -'^^0 

Guaranty of deposits by national banks - 903 

Guaranty of solvency of bank ^^2 

Guardian, power of national bank to act as 208 

Guardians, not personally liable 242 

1G4312°— 20 16 



242 INDEX TO NATIONAL-BANK ACT, ETC. 



H. 

Hawaii: ^ Paragi-apli, 

National banking laws applicable to 801 

Reserve requirements, etc. , for national banks in 411 

House of Representatives, Comptroller's report to be sent to 112 

Hypothecation: 

Of capital stock by directors restricted 233 

Of circulation prohibited 428 

Of stock by directors, prohibited 236 



INDEX TO XATIONAL-BANK ACT, ETC. 243 



1. 

Paragraph. 

Illegal preference of creditors 529 

Illegal use of title "National " 530 

Impairment of capital, assessment for 430 

Import-s and internal taxes, duties on. may be paid by certified check 769, 770 

Incomplete circulation (see also Circulation); Redemption of 417 

Increa.'^e of capital 228, 229, 304 

Individual liability, enforcement of 515 

Individual liability of shareholders 240 

Information concerning member banks to be furnished Federal Reserve Board 

by Federal reserve agent 527 

Injunction. {See Comptroller; Suits.) 
Insolvency: 

Assets, distribution of, by receiver 517 

Expenses incident to. report of Ill 

Funds of, where deposited 515 

Impairment of capital 430 

Jurisdiction of courts to enjoin Comptroller 701 

Jurisdiction of national-bank cases 214, 218 

Notice to creditors of associations in 516 

Penalty for issuing circulation of associations in 747 

Preference of creditors 529 

Receiver, appointment of 515 

Receiver, duties of 515 

Receiver, when may be appointed 51 5, 520 

Redemption of circulation of associations in 505 

Shareholders' agent 522 

Taxes on banks in, remitted 450, 715 

Inspection of list of shareholders 439 

Installments, capital stock may be paid in 226 

Installments, failiu-e to pay 227 

Insiu"ance agent, when national bank may act as agent for insurance company. . 209 

Insvu-ance company, insurance of solvency of bank by 902 

Insurance of deposits by national banks 903 

Interest-bearing Treasury notes are legal tender 727 

Interest in national banks prohibited: 

By Comptroller 106 

By Deputy Comptroller 106 

Interest. {See also JJsury): 

On bonds deposited with Treasurer 311 

Rate of, chargeable by national banks 422 

Interlocking directorates, when forbidden 234, 235 

Internal Revenue, Commissioner of: 

Penalty for failure to make returns to, of taxable circulation 712 

Remission of tax against insolvent State banks 450, 715 

Semiannual retiu-n to. of taxable circulation other than national 711 

Internal taxes, certified checks receivable for, under certain conditions 770 

International bimetalism, act March 14, 1900, relative to 762 

Interstate Commerce Commission, enforcement of act in reference to interlock- 
ing directorates, as to common carriers, by 235 

Issue and Redemption Di^isions established, Treasurer's Ofhce 752 

Issue of: 

Circulation by Comptroller of Currency 323 

Circulation to Federal reserve banks 317 

Gold certificates 433 

Gold certificates and gold certificates payable to order 754 

Gold notes, provision for 34 1 

Notes under |5 limited 329 

Post notes, etc. , prohibited 338 

Silver certificates 755 

Treasury gold notes in exchange for certain United Statci bonds 318 

Issuing circulation of expired associations, penalty for 747 

Isthmian Canal Commission, estimate of cost of Panama Canal 767 



244 INDEX TO NATIONAL-BANK ACTj ETC. 



J. 

Judgment (see also Suits): Paragraph, 

Appointment of receiver when judgment obta,ined against bank 520 

Illegal preference of creditors : 529 

Jurisdiction {see Crimes J lurisdiction, etc.) of suits by or against national banks. 218, 423 



K. 

Kansas, deposits guaranty law 901 



INDEX TO NATIONAL-BANK ACT, ETC. 245 



li. 

Larceny. (See Crimea, juriadiction, etc.) 

Lawful money: Paragraph. 

Defined 342, 414 

Defined for gold banks 342 

Deposit of, to retire United States bond-secm'ed circulation 312, 313, 314 

Exemption of circulation from taxation, when, deposited 706 

Expiring associations to deposit 221 

Extended banks to deposit 220 

Five per cent fund 414,416 

Forfeiture of bonds for failure to redeem circulation in 508 

Limit of amount, to be deposited monthly 314 

Liquidating associations to deposit 502 

Liquidating associations, consolidating not to deposit 503 

Payment of protested circulation in 510 

Protest of circulation for failure to redeem in 507 

Receiver to be appointed for failure to maintain reserve of 402 

Redemption account, disposition of 416 

Reserve to be 402 

Withdrawing circulation, deposit of 312, 313, 314, 414 

Lawful-money reserve, determined by deposits 342, 410 

Legal-tender coins, Philippine Islands 719 

Legal tender: 

Foreign coins not accepted as 719 

Gold coins 720 

Minor coins 724 

Silver dollars 722, 751 

Subsidiary silver coins 723 

United States notes 725, 726, 727 

Liability: 

Association's, for pledging, etc., United States notes, etc 432 

Converted State bank, for old notes 713 

Creditor's bill against shareholders 521 

Enforcement of individual, by receiver 515 

Estates owning stock subject to 242 

False certification of checks 434 

Individual, of directors 526 

Individual, of shareholders 240 

Limited to amount of capital, except 427 

Of stockholders who have transferred their shares 241 

Shareholder's, debars from voting 231 

Shareholders of certain banks exempt from 240 

Trustees, exempt from, when 242 

Liabilities: 

Associations organized under the act of February 25, 1863 247 

Change of title or location not to affect 212, 213 

Comptroller's annual report to contain statement of national banks 110 

Converted State banks 713 

Deficiency in reserve not to increase 402 

Deposit of lawful money relieves from, on circulation 504 

Duties of receiver 515 

Exceptions to limitation 427 

Extended associations 218 

Incurred under provisions of Federal reserve act, not considered borrowed 

money 427 

Limit of, for national banks 427 

Liquidating associations, on consolidation ?>0:l 

Loans, restrictions on 425 

Reports of condition to show 440 

Restrictions on 427 

Statements of condition to show 440 

To stockholders for unpaid dividends not considered borroweil mimey 427 

Lien, United States has paramount, on assets of association 611, 769 



246 INDEX TO NATIONAL-BANK ACT, ETC. 

Limitations: Paragraph. 

Associations, corporate existence 204 

Bonds, vrithdrawal of 311, 312 

Borrowed money not to exceed capital 427 

Capital, converted State banks 245 

Capital stock^ 

Increase of 228, 229 

Payment of . . 226 

Reduction of 230 

Requisite amount of 224 

Circulation — 

Denominations 324 

Deposit of lawful money on withdrawing 312 

Exempt from tax, when 706 

Obtainable 323 

Obtainable by gold banks 341 

Tax on 444, 714 

To be taken at par 421 

Unauthorized, tax on 708-710 

Corporate existence of converted gold banks 343 

Creditors of insolvent banks, notice to 516 

Creditors of insolvent banks, illegal preference 529 

Directors, number of 232 

Dividends 424, 429 

Expiration of corporate existence 221 

Extension of corporate existence 215, 222 

Gold certificates, denominations of 433 

Impairment of capital 430 

Interest rate _ , . . 422 

Isssue of notes under $5 329 

Jurisdiction, general, of national-bank cases 214, 2l8, 701 

Lawful money deposited to retire circulation 313 

Liability of national banks 427 

Location of associations, change of 211 

Loans to one individual, etc 425 

"National," in title of bank 530 

Place of business 400 

PubUc depositaries 243 

Real estate holdings 223 

Reserve, gold banks 342 

Receiver, appointment of 520 

Receiver, purchase of property to protect trust 523 

Reports of condition, transmitted 440 

Reports of earnings and dividends, transmitted 442 

Reserve requirements 402 

Reserve with central reserve agents 401, 405, 406 

Reserve with Federal reserve banks 405 

Reserve with reserve agents 402, 405 

Shareholders, personal lial>ility of 240 

Shareholders, personal liability of shareholders of certain converted banks. . 240 

Shares of stock, par value 225 

Shares of stock, directors to own 233 

State taxation of money 717 

State taxation of national banks 451 

Stock purchased or acquired 426 

Suits, conduct of 700 

Time for which own stock taken for debt may be held 426 

Time in which recovery may be made for usurious interest charges 423 

United States bonds deposited 302 

Visitorial powers 528 

Voluntary liquidation, vote 500 

Voluntary liquidation, deposit of lawful money 502 

Voters at elections 231 



INDEX TO NATIONAL-BANK ACT, ETC. 247 

Liquidation: Paragraph. 

Bonds withdrawn 504 

Creditor's bill against shareholders 521 

Consolidation 503 

Expiring associations to comply with provisions for 221 

Lawful money to be deposited 502 

Notice of, to be published 501 

Penalty for issuing circulation of associations in 747 

Redemption of circulation of associations in 505, 506 

Sale of bonds, when 504 

Vote required 500 

Liquidation and receivership {see also Iif|uidation; Receiver): 

Bonds, deficiency in, first lien on assets for redemption of circulation 511 

Bonds, forfeiture of 508 

Bonds, sale of, at auction 511 

Bonds, sale of, privately 512 

Bonds, withdrawal of 504 

Charter, forfeiture of 526 

Circulation , protest of 507 

Consolidation, provisions for 503 

Creditor's bill against sharehold?rs 521 

Deposit of collections by receiver 515 

Deposit of lawful money on liquidation 502 

Distribution of assets of insolvent associations 517 

Enjoining proceedings 518 

Enjoining proceedings, where brought 702 

Expiring associations 221 

Illegal preference of creditors 529 

Jurisdiction, general, of national-bank cases 214 

Jurisdiction of district courts 701 

Notice of vote to Liquidate 501 

Notice to creditors of insolvent associations 516 

Notice to present circulation for redemption 510 

Penalty for issuing circulation of expired associations 747 

Receiver, appointment of 515 

Receiver, purchase of property to protect trust o2:i 

Receiver, when may be appointed 520 

Receivership, expenses of 519 

Shareholders' agent, appointment of 522 

Shareholders' agent, duties of 522 

Suits, conduct of 700 

Suspension of business for nonpayment of circulation 509 

Taxes on insolvent associations remitted 450, 715 

Vote required for liquidation 500 

List of shareholders 439 

Loans : 

Associations' liability restricted 427 

Bank not to grant loan to any national bank examiner 438a 

Circulation as collateral for, restricted 428 

Limitation of, to one individual, etc 425 

No officer, director, or employee to receive any commission for any loan. . 438c 

On farm lands 205, 223 

Prohibited on security of own stock 426 

Prohibited when reserve is short 409 

Real estate, prohibited 223 

Location (see also Title and location): 

Change of 21 1, R()3 

Of banking house -'OO 

Organization certificate, to state 202 

Losses, bad debts and, to be deducted from profits before declaring dividend . . 429 

Lost or stolen national-bank notes, redemption of 417 



248 INDEX TO NATIONAL-BANK ACT, ETC. 



M. 

Maii-eration; ^ Paragraph. 

Redeemed circulation to be disposed of by 340 

Redeemed circulation of failed and liquidated banks to be disposed of by . 506 

Management by directors 232 

Maximum. (See Bonds; Capital; Circulation; Limitations.) 

May change name and location, how 211 

Meetings, annual 232 

Member bank examiners 527 

Member banks: 

Depositaries of United States 615 

Examinations by Federal Reserve Board 527 

Limit to deposit that may be kept with nonmember bank 408 

Officer, director, or employee not to receive any fee, commission, etc 438 

Prohibited from securing discounts from Federal reserve banks for non- 
member banks 408 

Pro\'isions for national banks outside of continental United States to become 411 

Reserve requirements 403-412^13 

Reserve, withdrawal of, from Federal reserve banks 409 

Statement and reports by 441 

Method of refunding United States bonds as permitted by Federal reserve act. 316 

Minimum (see Bonds; Capital; Circulation; Limitation) amount of capital 224 

Minor coins: 

Philippine Islands, legal tender 719 

United States, when legal tender 724 

Misapplication : 

Money-order funds 732 

Penalty for 436 

Misdemeanor. (See Crimes; Penalty; Official malfeasance.) 

Money-order funds, misapplication of 732 

Moneys. (See Lawful money; Legal tender; Circulation; Public moneys.) 

Monthly installments, capital may be paid in 226 

Mortgages: 

Assignment of, when illegal 529 

Assignment, when official malfeasance 436 

Real estate, possession, etc. , of, by association 223 

Mutilated, circulation of failed and liquidated to be 506 

Mutilated or worn circulation, redemption of 339,414 



INDEX TO NATIONAL-BANK ACT, ETO. 249 



N. 

Paragraph. 

Name, change of, by national bank 211, 803 

Name of association to be approved of by Comptroller of Currency 202 

National, use of the word, in titles of associations other than national, prohibited. 530 
National -bank act: 

Authority for title 200 

Provides for a national currency, etc 200 

Status of national banks organized under the act of February 25, 1863 247 

National -bank examiners 527 

National Banking Association defined 300 

National Banking Associations: 

Acceptance of drafts and bills of exchange 206 

Amendment of articles of association restricted 225 

Articles of association entered into by 201 

Borrowed money restricted 427 

Branches may be retained by converted State banks 246 

Capital required 224 

Cancellation of redeemed circulation 514 

Certificate of officers and directors 319 

Change of name and location 803 

Change of title and location 211-213 

Charter forfeiture 526 

Charter number to be printed on circulation of 325 

Circulation obtainable by .- 323 

Circulation of, tax on 444-450, 717 

Circulation of, to be redeemed in United States notes 414 

Circulation to be taken at par 421 

Circulation of, for what receivable 337 

Circulation unsigned or with forged signatures to be redeemed 417 

Closed bank circulation 505, 506 

Comptroller and Deputy Comptroller not to be interested in, issuing circu- 
lation 106 

Consolidation, no deposit required for circulation of liquidated banks 503 

Conversion of State banks into 245 

Corporate and incidental powers of 204 

Defined 300 

Depositaries of public money 243 

Deposit of bonds by. requirement repealed 302 

Directors of, individually liable, when 526 

Directors, number and election of 232 

Directors, oath of 236 

Directors, qualifications of 233 

Election, holding annual 232, 238 

Enjoining proceedings 518 

Examination of, prior to being authorized to begin business 319, 320 

Examiners of 527 

Excepted from certain taxes on circulation 714 

Expiration of corporate existence, provisions on 221 

Extended bank circulation 220 

Exchange of bonds 305 

Extension of corporate existence of 215, 217 

Foreign branches 210 

General provisions respecting bonds 311 

Gold bank circulation, provisions for issuing 341 

Gold banks may be organized 34 1 

Gold banks, conversion of 343 

Increase of capital stock by 228, 229 

Insurance or guaranty <>f deposits by 903 

Lending on own stock prohibited 426 



250 INDEX TO NATIONAL-BANK ACT, ETC. 

National Banking Associations — Continued. Paragraph. 

Liquidating bank circulation 502-506 

Liquidation, provisions for 500-504 

Loans on farm landa 205 

Loit or stolen notes of, to be redeemed 417 

Not required to deposit United States bonds 302 

Organization certificate to specifically state 202 

Payment of stock prior to beginning "business 226 

Place of business 400 

Political contributions prohibited 437 

Post notes, issue of, prohibited 338 

Power to act as trustee, administrator, executor, or registrar of stocks and 

bonds 208 

Power to insure solvency of bank 902 

Preparation of bank circulation 324 

President of, to be chosen by board 239 

Publication of certificate of authority 321 

Purchasing own stock prohibited 426 

Receiver may be appointed for failure to restore capital 227 

Reduction of capital stock 230 

Receiver for, when may be appointed 520 

Redemption and destruction of circulation of 339, 340, 414 

Redemption account, disposition of 416 

Regulation of business of 400 

Relation of bond deposit to capital of 304 

Reserve requirements 403-412 

Reserve requirements outside of continental United States 411 

Security for circulation 302. 303 

Shares of stock 225 

Shareholders of, qualifications of, at election 231 

Shareholders' agent 522 

Shareholders of, personally liable 240 

Shareholders of, when not personally liable 240 

Status of, organized under the act of February 25, 1863 247 

Subscribed stock not paid for, forfeited to 227 

Suspension of business after default to pay circulation 509 

Taxation of circulation of, by States, etc 716, 717 

Tax provisions restricted 714 

Taxes on insolvent, remitted 450, 715 

Transfer of shares of stock 241 

Where proceedings to enjoin must be brought 702 

Withdrawing circulation 312, 313, 314 

National banks deemed citizens of States in which located 214 

National banking laws applicable to Hawaii 801 

National banking laws applicable to Porto Rico 800 

National-bank notes obligations of the United States 739 

National-bank notes, penalty for counterfeiting 714 

Newspaper: 

Certificate of authority to commence business to be published in 321 

Election notice to be given in 238 

Impairment of capital, notice to be published in 430 

Liquidation notice to be published in 501 

Notice of meeting to elect shareholders' agent to be published in 522 

Notice to creditors of insolvent banks to be advertised in 516 

Reports of condition to be published in 440 

Sale of stock of delinquent shareholders to be published in 227 

New York City: 

Associations in, reserve agents 402. 420 

Bonds of liquidated banks that failed to make deposit, to be sold in 504 

Bonds, sale of forfeited, in 511 

Designated as central reserve city 401 

Notice of expiration of corporate existence to be published in paper in 221 

Notice of voluntary liquidation to be published in paper in 501 

Met profits, (See Dividefida.) 



INDEX TO NATIONAL-BANK ACT. ETC. 251 

Nonmember banks: Paragraph. 

Amount of deposit that may be kept with, by member banks, restricted . . 408 

Discounts from Federal reserve banks not allowed through member banks. . 408 

Reserve requirements for national banks that are 411 

Nonresidents: 

Directors 233 

State, etc. , taxation of stock of 451 

No release from liabilities by change of title or location 213 

Notary public: 

Acknowledgment of organization certificate before 203 

Acknowledgment of reports 440-442 

Protest of circulation by 507 

Notes {see Circulation) of the United States are legal tender 725-727 

Notice {see Publication; Printing): 

Creditors of insolvent banks to present claim 516 

Of election 238 

Of sale of bonds 511 

Of transfer of bonds to be given association 308 

To present circulation for redemption when bonds have been forfeited 510 

Notification of redemption of circulation by United States Treasurer 414 

Number of: 

Central reserve cities 401 

Copies of annual report 112, 113 

Examinations to be made 527 

Reports of condition that may be called for 440 

Null and void , illegal preference 529 



252 INDEX TO NATIONAL-BANK ACT, ETC. 



O. 

Oath: Paragraph. 

Certificate of officers and directors 226, 319 

Directors 236 

Examiners may take statement under 527 

Execution of organization certificate 203, 245 

Official, by Comptroller 102 

Official, by Deputy Comptroller 103 

Payment of installments 226 

Reports of condition, and earnings and dividends 440-442 

Semiannual return of circulation 446 

Shareholders, list of 439 

Obligations of the United States: 

Defined 739 

Exempt from taxation 716 

Penalty for — 

DeaUng in counterfeit 746 

Illegal possession or use of material for 742 

Passing counterfeit 743 

Pledging 432 

Taking or having unauthorized impression of tools, etc 745, 746 

Office force for redemption of circulation 415 

Officers {see also President; Cashier): 

Bonds assigned to be signed by cashier or other 306 

Certificate of directors and 319 

Certificate of pajonent of increase of stock 228 

Certification of payment of stock by president or cashier 226 

Circulation properly signed by, issuable 337 

Disqualified to examine national banking associations in which interested 

as 527 

Election or appointment of, by directors 204 

Examination of, under oath 527 

False certification of checks, forbidden 434 

Forfeiture of charter, pro\'isions for 526 

Forged signatures of, to circulation, not to invalidate 417 

Fraudulent notes to be marked by 748 

Interest rate of paid officers 438e 

Oath, administration of, to reports 441 

Official malfeasance, penalty for 436 

Penalty for false certiication of checks 435 

Penalty for improperly countersigned, etc., circulation 344 

Penalty for issuing circulation of expired associations 747 

Penalty for official malfeasance 436 

Penalty for pledging, etc., circulation 432 

Penalty for political contributions 437 

Penalty for receiving commission for a loan 438c 

Penalty for unauthorized receipt of public money 738 

Preference of creditors 529 

President of board a director 239 

President or cashier — 

Certification of extension 216 

Certification of expiration of existence 221 

Certification of liquidation 501 

Waiving notice of protest 507 

President or vice president and cashier to sign circulation 324 

Proxy, not to act as 231 

Receiver, appointment of, for violation of national-bank act by 520 

Redemption of unsigned circulation 415 

Reports of condition, verification of, by president or cashier 440, 441 

Reports of earnings and dividends, attestation of, by president or cashier . . 442 

Shareholders ' lists verified by president or cashier 439 

Taxation, circulation subject to, returns by president or cashier. 446 

Taxation, unauthorized circulation, returns by president or cashier 711 

Officers, United States: 

Deposit and withdrawal of public money 730 

Penalty for improper countersigning or delivering circulation 344 

Penalty for unauthorized deposit of public money 737 

Receiving or disbursing public money to mark fraudulent 748 

Offices, vaults, e'ic, assignment of, to the Comptroller by the Secretary 108 



INDEX TO NATIONAL-BANK ACT, ETC. 253 

Official: Paragraph. 

Malfeasance, penalty for 43^ 

Register, information for m 

Seal of Comptroller of the Currency 107 

Oklahoma, deposit guaranty law 900 

Organization and powers of national banks: 

Amendment of articles of association 225 

Articles of association 201 

Branches of converted State banks 246 

Capital stock 202 

Capital stock requirements 224 

Certificate of authority to begin business ' 320 

Certificate of officers and directors 319 

Change in title and location 211 

Conversion of gold banks 343 

Conversion of State banks 245 

Corporate powers 204 

Deposit of bonds 302 

Directors, election of 238 

Directors, number and election of 232 

Directors, oath of 236 

Directors, qualification of 233 

Directors, to choose president 239 

Directors, vacancy, how filled 237 

Enforcing payment of stock 227 

Examination preliminary to beginning business 319 

Execution of organization certificate 203 

Extension of corporate existence 215 

Failure to hold election 238 

Gold banks, conversion of 343 

Gold banks, organization of 341 

Incidental powers 204 

Increase of capital stock, provisions for 228. 229 

Increase of capital stock, when vaUd 228 

Liquidation 500 

Location and title, change of 211 

Location 202 

Organization certificate 202 

Payment of stock 226 

President, election of, by board 239 

President, qualification of 239 

Publication of certificate of authority to begin business 321 

Reduction of capital stock, pro^dsions for 230 

Restoration of capital stock 227 

Shareholders 202 

Shareholders, personal liability of 240 

Shareholders, qualification of, at electiop 231 

Shareholders, when personally liable 240 

Shares of stock 225 

State banks, conversion of 245 

State banks, converted, may retain branches 246 

Status of associations organized under act of Feb. 25, 1863 247 

Title 202 

Title and location, change of 211 

Vacancies in board, how filled 237 

Organization certificate: 

Acknowledgment of 203 

Certified copy of, evidence 704 

Comptroller to grant or withhold 320 

Conversion of gold banks 343 

Conversion of State banks 245 

Execution of 203 

Sealed certificate of Comptroller, evidence. . "03 

Specifications in 202 

Other bonds to secure deposits 243 

Other real estate owned - • 223 

Other cities may be designated as central reserve cities 401 

Other reserve cities. {See Reserve cities.) 

Overdue paper "^^ 



254 INDEX TO NATIONAL-BANK ACT^ ETC. 



P. 

Panama Canal bonds: Paragraph. 

Additional issue 767 

Available and nonavailable as security for circulation 303, 768 

Issued under act Aug. 5, 1909, not receivable as security for circulation. . 768 

Tax on circulation secured by 303, 444 

Panama, reserve rec^uirements, etc., for national banks in 411 

Paper for printing circulating notes 326 

Paper used for United States securities, penalty for use of without authority.. . 742 

Par, bonds not to be sold at less than 512 

Par, national banks to take notes of other national banks at 425 

Par value of capital stock of converted State banks 245 

Par value of stock 225 

Passing counterfeit circulation, penalty for 743 

Past due paper 429 

Payment of: 

Assessment for impaired capital 430 

Capital stock, provisions relative to 226 

Claims against insolvent banks 517 

Tax on circulation - 444 

Tax on circulation other than national 710 

Payments for: 

Purchase of property by receiver provided for 525 

Whidi national bank notes are receivable 337 

Penalty: 

Appointment of receiver for violations of act 515, 520 

Bond of Comptroller 102 

Bond of Deputy Controller 103, 104 

Circulating notes less than $1, issue of 718 

Commission, penalty for receiving commission for a loan 438c 

Counterfeiting circulation, etc 740, 747 

Dealing in counterfeit circulation 746 

Embezzlement, abstraction, willful misapplication, false entries, etc 436 

False certification of checks ^ 435 

Failure to make reports 443 

Failure to pay installment on stock 227 

Failure to redeem circulation 508 

Forfeiture of charter for violauons of bank act 526 

Forging or counterfeiting United States securities 740 

Illegal possession or use of material for circulation 742 

Imitating bank circulation for advertising purposes 345 

Improper countersigning or delivering circulation 344 

Interest, unlawful 423 

Interlocking directorates T 235 

Issuing circulation of expired associations 747 

Jurisdiction of the United States courts 214, 218 

Mutilating circulation 346 

Misapplication of money-order funds 732 

"National," unlawful use of the word 530 

Official malfeasance 436 

Passing counterf ei t circulation 743 

Pledging United States notes or bank circulation 432 

Keports to Comptroller, failure to make 443 

Reserve, maintenance of 402 

Reserve, shortage «. 409 

Semiannual return of circulation, failure to make 446-449 

Taking or having unauthorized impression of tools, etc 744, 745 

Unautliorized deposits of public money 737 

Unauthorized receipt or use of public money 738 

Usury 422,423 

Violations of any of the provisions of the bank act 526 

Violations of section 22, Federal reserve act 438f 

Period for which real estate may be held 223 

Personal liability. (See Shareholders; Tnistees; Liability.) 

Personal property, shares of stock of national banks taxed as 451 

Philippine Islands, legal-tender coins — 719 



INDEX TO NATIONAL-BANK ACT, ETC. 255 

Philippine Islands; Paragraph. 

Public funds in the United States to be deposited in member banks 615 

Reserve rec^uirements, etc., for national banks in 411 

Photographing United States securities without authority, penalty for 742 

Place of business, organization certificate to state 202, 400 

Place for redemption of circulation 414 

Place where proceedings to enjoin Comptroller must be brought 702 

Place where tax on shares in national banks is to be paid 451 

Places where circulation may be redeemed 414 

Plates: 

Control of 327 

Cost of engraving 220, 327, 414 

Custody of 108 

Engraving of 324 

Examination annually 328 

Expense of examination and destruction of 328 

Extended banks 220 

Liquidating bank, to be destroyed 328 

Penalty for counterfeiting or having jtossession of counterfeit 742, 744 

Penalty for taking unauthorized impression of tools, etc 744 

Penalty for having false impressions of tools, etc 745 

Pledging or hypothecating circulation prohibited 428 

Political contributions prohibited 437 

Population, relation of capital stock to 224 

Porto Rico: 

National banking laws applicable to 800 

Reserve requirements, etc., for national banks in 411 

Postal savings funds to be deposited in member banks 615 

Postmasters; 

Deposit of public funds by 731 

Misapplication of money-order funds by . 732 

Postmaster General, deposit of funds by authority of 732 

Post notes, national banking associations prohibited from using 338 

Power: 

Comptroller to assess fine for failure to make reports 443 

Of attorney to receive interest on bonds 311 

Of national banks to act as trustee, executor, etc 208 

Of national banks to insure deposits 903 

To hold real property 223 

Powers {see also Comptroller): 

Granted to national banks 204 

Incidental, of national banks 204 

Of examiners 527 

Of national banks to insure solvency of bank 902 

Receiver 515. 523 

Shareholders' agent 522 

Trust company, powers of national banks 208 

Visitatorial, limitations of 528 

Preference : 

In allotment of shares in aucceeding association 219 

Of creditors illegal 529 

Preliminary examinations, expense of 519 

Preparation of circulation, provisions for 324 

President (see also Officers): 

Certificate of officers and directors 319 

Certificate of stock payment 319 

Countersigning or delivering circulation improperly 344 

Director to be 239 

Election or a])pointment of, by directors 201. 239 

False certification of checks by, and penalty for 434. 435 

Liquidating bank, duty in 501 

Of the board, election of 239 

Official malfeasance, penalty for " 436 

Proxy, not to act as 231 

Public money, unauthorized receipt of , by 738 

Reports of condition, verified by 440 

Reports of earnings and di\adends to be verified by 442 

Signature of, forged, not to invalidate circulation 417 



256 INDEX TO NATIONAL-BANK ACT, ETC. 

President (see also Officers) — Continued. Paragraph. 

Signature of, on circulation 324, 337 

Violations of act, by, penalty for 436, 526 

President of the United States, appointment of Comptroller by 101 

Printing: 

Annual report of the Comptroller, number printed and distribution of. . 110-112 

Certificate of authority to begin business 321 

Charter number on circulation 325 

Circulating notes on distinctive paper 326 

Circulation of associations 324 

Circulation of extended banks 220 

Creditors of insolvent associations, notice to 516 

Notice of special annual election 238 

Notice of sale of delinquent stock 227, 430 

Notice of sale of bonds at public auction 511 

Notice of liquidation 501 

Notice of expiration 221 

Peralty for counterfeiting circulation 741 

Penalty for illegal piossession or use of material tor circulation 742 

Penalty for imitating circulation 345 

Penalty for taking or having unauthorized impression of tools, etc., for . . . 744, 745 

Reports of condition 440 

Shareholders agent, notice of election of 522 

Voluntary liquidation, notice of. . 501 

Private sale of bonds to secure circulation 512 

Proceedings: 

If shareholder fails to pay installments 227 

To enjoin Comptroller 701, 702 

Where no election is held on the proper day 238 

Profits, undivided, not considered borrowed money 427 

Prohibitions: 

Borrowed money in excess of capital 427 

Business not to be transacted until authorized by Comptroller 204 

Circulation, pledging of 428 

Comptroller or Deputy Comptroller from being interested in any association 

issuing national currency 106 

Counterfeiting, etc _. 740, 746 

Deposit of Government money in banks not belonging to Federal Reserve 

System 244 

Imitation of circulation 345 

Interlocking directorates ._ 234 

Issuing circulation to unauthorized associations 344 

Loaning on own stock 426 

Loans in excess of a certain limit 425 

Member bank limited in amount of deposit with, and forbidden to secure 

discounts from. Federal reserve banks for nonmember banks 408 

Mutilation of circulation 346 

National-bank notes not to be used as security for loans 432 

Notes less than $1 718 

Officers of bank not to administer oath for reports of condition 441 

Political contributions 437 

Postmasters not to receive interest on deposits 731 

Posts notes, issue of 338 

Public funds of Philippine Islands, postal savings or any Government 

funds not to be deposited in banks other than member 615 

Purchase of own stock 426 

Heserve shortage 409 

Restriction as to visitatorial powers 528 

Sale of bonds for default of payment of circulation at less than par 512 

Unauthorized deposit of public money 737 

Unauthorized receipt of public money 738 

Uncurrent notes not to be put in circulation 431 

United States notes not to be used as security for loans 436 

Use of title "National" 530 

Using plates to print notes without authority 742 

Usurious rate of interest 422 

Voters at elections 231 

Withdrawal of capital 421 



INDEX TO NATIONAL-BANK ACT, ETC. 257 

Paragraph. 

Proof of publication, report of condition 440 

Protest of circulation: 

Bonds forfeited, when 508 

Bonds, sale of, when 51 1 . 512 

Failure to redeem circulation 507 

Provisions : 

Appointment of receiver 51 5 

Assessment when bank fails to make return on circulation 447 

Dividends 424 

Enforcing payment of tax on circulation 448 

Examination of bonds and records 309-311 

Excess payment of tax on circulation, refunding of 449 

Federal Tleserve Board to sell United States bonds to Federal reserve 

banks 316 

For changes in deposit of bonds 304 

For deposits by disbursing officers 730 

For deposits by postmasters 731 

For destruction and replacing of circulation 339, 340 

For liquidation of banks at expiration of charter 221 

For national banks outside the continental United States to become mem- 
ber banks 411 

For obtaining circulation 323 

For organization of gold banks 341 

For redeeming circulation 414 

For redemption of circulation when charter is extended 220 

For reimbursement of expenses for redemption of circulation 415 

For withdrawal of circulating notes 312 

Gold certificates, issue of 433 

Impairment of capital 430 

Inspection of list of shareholders 439 

Liquidation 500. 501 

Of articles of association 201 

Of by-laws 204 

Payment of tax on circulation 444 

Reports of condition 440 

Respecting bonds, general 311 

Retirement of circulation by sale of United States bonds 315 

Shareholders' agent, election of 522 

Surplus 424 

To be complied with before commencing business 302. 319 

Proxies authorized 231 

Proxies can vote for shareholders' agent 522 

Publication (see also Printing) : 

Annual election, notice of holding special 238 

Certificate of authority to begin business 321 

Creditors of insolvent associations, notice to 516 

Nonpayment of circulation, notice to present 510 

Reports of condition of national banks 440 

Sale of bonds, notice of 511 

Sale of delinquent stock, notice of 227, 430 

Shareholders' agent, notice of election of 522 

Voluntary liquidation, notice of 501 

Public debt, national-bank circulation receivable for, with certain exceptions. 337 
Public deposits (see alio Deposits) : 

Banks to ^ve security for 243 

Duty of disbursing officers 730 

Duty of postmasters 731 

Postmasters 731 

Purchase of real estate 223 

Public dues, certified checks receivable for, under certain conditions 770 

PubUc sale of stock purchased from dissenting shareholders 219 

Pulp from macerated circulation 340 

Purchasing own stock prohibited 426 

Purchase of property by receiver ■'•'2-'>, 525 

Purchase of Umted States bonds by Federal reserve banks 316 

Purpose of organization certificate to be stated therein 202 

iUWTJ''— 20 17 



258 INDEX TO NATIONAL-BANK ACT, ETC. 



Q. 

Qualification: Paragraph. 

Comptroller of the Currency 102 

Deputy Comptroller 103 

Directors of national banks 233 

Examiners of associations 527 

Shareholders' agent 522 

Quarters for Currency Bureau 108 



INDEX TO NATIONAL-BANK ACT, ETC. 259 

R. 

Rate. [See Interest; Tax; Usury.) Paragraph. 

Kate of interest which may be charged 422 

"Ratio. (See Bonds; Capital and circulation.) 

Real estate: 

Investments and holdings restricted 223 

Loans on, permitted with certain restrictions 205 

Mortgages, limited 223 

Subject to State, etc., taxation 451 

Real estate broker, when national bank may act as broker in procuring loans 

on real estate 209 

Reassignment of bonds, liquidating bank 504 

Receipt for bonds transferred 306 

Receiver: 

Appointment and duties of 515 

Appointment of — 

For failure to dispose of own stock 515 

For failure to restore diminished capital 515 

For false certification of checks 515 

For nonpayment of circulation 515 

For impairment of capital 515 

For insolvency 520 

For nonmaintenance of reserve 515 

When capital reduced by failure to pay installments 227 

Courts may enjoin 518 

Deposit of collections by 515 

Expenses of, how paid 519 

General jurisdiction of national-bank cases 214 

Jiirisdiction of district courts to enjoin Comptroller or 701 

• National bank as receiver under trust company powers 208 

Purchase of property by, to protect trust 523 

Receiverships. (See Liquidation and receivership; Receiver.) 

Rpcoinage of uncurrent subsidiary silver 757 

Records, regulations for redemptions 513 

Red Cross, subscriptions to 771 

Redeeming circulation 414 

Redemption: 

Cancellation of circulation sent for 514 

Deposit of lawful money for, of associations in liquidation 502 

Division, Treasurer's Office, established 752 

Disposition of, account 416 

Enjoining Comptroller 518 

Extended bank circulation 220 

First lien on assets 511 

Five per cent fund for— 

To be maintained 414 

Not part of lawful reserve 412. 414 

Forfeitiu'e of bonds 508 

Forged signatures not to prevent 417 

General provisions respecting 414 

Incomplete circulation 417 

Issue and Redemption divisions established 752 

Lawful money, of circulation 414 

Liquidating bank circulation 504, 505 

Lost national-bank notes 417 

Notice to present circulation for 510 

Of circulating notes issued prior to extension 220 

Of circulation, place for 414 

Proceeds from sale of bonds for, of circulation 504 

Profit on circulation not presented for 220 

Protest of circulation, for failure to redeem 507 

Records of 513 

Retirement account 416 



260 INDEX TO NATIONAL-BANK ACT, ETC. 

Redemption — Continued. , Paragraph. 

Sale of bonds 511, 512 

State bank circulation 706 

Stolen national-bank notes 417 

United States notes, of circulation, in 414 

United States and Treasury notes, to be in gold 750 

Unsigned circulation to be redeemed 417 

Withdrawn circulation. 312. 313 

Worn or mutilated circulation 339, 340 

Redemption account, disposition of 414 

Redemption of United States notes, gold coin and bullion to be set apart as 

reserve for 750 

Reduction of — 

Bonds to secure circulation 311 

Capital 230, 304 

Circulating notes 313 

Reextension of charter 222 

Refunding — 

Bonds under provision of Federal reserve act 315 

Excess payment tax on circulation 449 

Of United States bonds 759 

Of United States bonds under Federal reserve act 315 

Register of the Treasury, signature on circulation 324 

Registered bonds, intended by term "United States bonds " 301 

Registered bonds, exchange of coupon bonds for 305 

Registrar of stock and bonds, power of national banks to act as 208 

Registry of transfer of bonds 307 

Regulations for exchange of bonds 323 

Regulations for redemption records 513 

Regulation of banking business: 

Assessment, enforcement of 430 

Circulation, improper use of 428 

Dividends 424 

Dividends prohibited, when 429 

Examiners, appointment of 527 

Examiners, compensation of 527 

Impairment of capital 430 

Interest, limited 422 

Interest, unlawful, penalty for 423 

Laws governing certain associations 300 

Liability of association restricted 427 

Loans, restrictions on 425 

Net profits 424 

Place of business 400 

Real estate, purchasing, etc 223 

Reports of condition 440 

Reports, failure to make 443 

Reports, verification of 441, 442 

Reports of dividends and earnings 442 

Reserve cities 402 

Reserve cities, balances with agents 406 

Reserve cities, central 401, 402 

Reserve cities, requirements 402 

Reserve requirements, gold banks 342 

Shareholders, list of 439 

State taxation of associations 451 

Stock, holding, etc 426 

Sxirplus and dividends 424 

Uncurrent notes, use of, prohibited 431 

Unearned dividends prohibited 429 

Visitatorial powers, limitation of 528 

Reimbursement (see Circulation; Expense; Plates and dies) of expenses for 

redemption of circulation 415 

Removal of Comptroller of the Currency 101 

Replacing worn-out and mutilated circulation 339 



INDEX TO NATION AL-BANK ACT, ETC. 261 

Reports: Paragraph. 

Amendments proposed in Comptroller's annual 110 

Annual, number to be printed 112. 113 

Annual, to be made to Congre.s.s 110 

Banks' , other than national 110 

Circulation, semiannual return of 446 

Closed banks 1 10. 1 II 

Condition of national banks in annual 110 

Distribution of annual 112. 113 

Dividend.s and earnings 442. 443 

Failure to make, to Comptroller 443 

List of shareholders 439 

Of examiners 527 

Payment of capital stock 226, 227 

Printed, number of copies of annual 112, 113 

Receiver, to Comptroller 515 

Statement of condition of national banks, Federal reserve banks, and 
member banks 440. 441 

Requirements prior to commencing business 319 

Requisite: 

Amount of capital 224 

Qualifications of directors 233 

Requisites of organization certificate 202 

Reser\-ation of rights of associations organized under act of 1863 247 

Reser^•e : 

Clearing-house certificates 402 

Deposits to govern amount of 410 

Determined by deposits, not circulation 402 

Federal reserve banks, that may be held with 405-407 

Five per cent fund not counted as 412. 414 

Gold and silver, held by gold banks 342 

Gold certificates 433 

Lawful money 402, 414 

Maintenance of 402 

None required to be held against United States deposits 413 

On circulation not required 402 

Penalty for failure to maintain 402 

Proportion of, with agents 401, 405, 406 

Proportion of, with Federal reserve bank 405 

Requirements 402-412 

Required to be held with Federal reserve bank 407 

Requirements for gold banks 342 

Silver certificates 729 

Withdrawal of, from Federal reserve bank 409 

Reserve agents (««€ afeo Agent), balance with 401, 405. 406 

Reserv^e cities: 

Additional, provisions for 401, 402 

Cash reserve required 406 

Central, deposits in 401, 402, 405, 406 

Central, provisions for 401 

Classification of 402 

Designation of 402 

Distribution of reserve to be held by banks in 406 

Names of 402 

Requirements, not applicable to gold banks in San Francisco 401 

Requirements of associations in 402, 406 

Reserve requirements 406 

Reserve that may be held with, by banks elsewhere than in reserve cities . . . 405 

Reserve requirements: 

Banks not in reserve or central reserve cities 405 

Central reserve cities 401. 407 

Country banks 405 

Estimate of 410 

Five per cent redemption fund not counted as reserve 412 

How estimated ■* 1*^ 

Reserve cities other than central 402, 406 

When effective 404 



262 INDEX TO NATIONAL-BANK ACT, ETC. 

Residences: Paragraph. 

List of shareholders and, reported annually 439 

List of shareholders and, in organization certificate 202 

National ban'cs 214 

Qualifications of directors of associations 233 

Resources. (See Assets.) 

Restoration of capital stock, provisions for 227, 430 

Restrictions: 

Amount of lawful money that may be deposited to withdraw circulation. . 314 

Gold certificates, issue of 729 

Notes less than $1 718 

On banks' indebtedness 427 

On loans 425 

State tax on national-bank shares 451 

Tax on circulation 714 

Upon use of circulating notes 428 

Visitatorial powers limited 528 

Resumption of specie payments 329 

Retirement account, circulation for which deposits made to redeem 416 

Retirement of: 

Circulating notes 313 

Circulation by deposit of lawful money 314 

Circulation by sale of L'nited States bonds 315 

Retiring circulation under provisions of Federal reserve act 315 

Returns. (5ee Circulation; Reports; Taxation.) 

Right of shareholders to vote 231 

Rooms, vaults, and furnitiure for Currency Bureau 108 



INDEX TO NATIOXAL-BANK ACT, ETC. 263 

s. 

Paragraph. 

St. Looiis designated as a central reserve city 401 

Salaries of examiners 527 

Sale: 

Assets of insolvent association, by receiver 515 

Assets of insolvent associations, by shareholders' agent 522 

Bonds, for failure to redeem circulation 504, 508, 511, 512 

Of stock purchased from dissenting shareholders ' 219 

Stock, for delincjuent payment of installment 227 

Stock, for impairment of capital 4.30 

Stock taken for debt 426 

Savings accounts as time deposits 403 

Savings banks, statements to be given in annual report 110 

Seal, power of association to adopt and use 204 

Seal of Office of Comptroller: 

Certified copy of organization certificate under, evidence 704 

Certificates under, competent evidence 703 

Description, impression of, and certificate of approval by Secretary' of the 

Treasury-, to be filed with the Secretary of State 107 

Devised by Comptroller and approved by Secretary 107 

Secretary of Interior, report to, of bureau employees Ill 

Secretary of State, description, impression, and certificate of seal of Comp- 
troller to be filed with 107 

Secretary of the Treasury: 

Agent, special, to be appointed for associationB failing to redeem circula- 
tion 508 

Appointment of clerical force, for redemption of circulation, by 415 

.Appointment of Comptroller on recommendation of 101 

Appointment and classification of clerks by 105 

Appointment of Deputy Comptroller by 103, 104 

Assignment of rooms, etc., for the Comptroller by 108 

Authorized to exchange registered for coupon bonds 305 

Authorized to issue 3 per cent gold bonds and Treasury gold notes 318 

Certified checks may be received for duties, internal taxes, and all public 

dues upon regulations prescribed by 770 

Circulating notes printed under direction of 326 

Circulation, worn or mutilated, destruction of, by 339, 340 

Clerks for Comptroller of the Currency appointed by 105 

Deposit of Government moneys upon direction of 615 

Depositaries of public moneys designated bj' 243 

Duties of Comptroller under general direction of 100 

Earnings from Federal reserve banks, disposition of, by 750 

Examiners, appointments to be approved by 527 

Exchange of bonds, terms of, prescribed by 31 1, 323 

Gold certificates, authority to issue 433, 729 

Gold certificates to be issued by 754 

Gold dollar to be maintained as standard unit of value by 749 

Gold notes may be issued by, in exchange for certain United States bonds. . . 318 
Gold reserve for redemption of United States aud Treasury notes to be 

maintained by 750 

May prescribe rules for printing charter numbers on circulation 325 

Kational bank examiners, appointments to be approved by 527 

Notice to present circulation for redemption when bonds have been for- 
feited 510 

Organization of national banks with capital less than $100,000 to be approved 

by 224 

Panama Canal bonds, additional issue by 767 

Plates and dies, regulations for, examination of, to be approved by 328 

Post-office money-order funds placed in national banks designated by... 732 



264 INDEX TO NATTONAL-BANK ACT, ETC. 

Secretary of the Treasury — Continued. Paragraph. 

Public-money deposits 730 

Pulp from maceration to be disposed of by 340 

Purchase of property by receiver to be approved by 524, 525 

Recommendation of appointment of Comptroller by 101 

Receivers, appointment of, by Comptroller, concurrence in by, in certain 

cases ; 402 

Refunding United States bonds 759 

Regulations for redemption records 513 

Regulations for reimbursement of circulation retirement account 416 

Seal of office of Comptroller to be approved by 107 

State- bank circulation, regulations for redemption of, to be prescribed by. 706 

Sureties on bond of Comptroller of Currency to be approved by 102 

Sureties on bond of Deputy Comptroller to be approve by 103, 104 

When silver dollars are coined. Treasury notes to be canceled, and silver 

certificates to be issued by 753 

Withdrawal of circulation to be approved by 314 

Sections of Revised Statutes, not included in the national-bank act, affecting 
national banks 700-770 

Seciu-ity for circulation (see Bonds, United States), United States bonds as. . 302, 303 

Security for Government deposits 243 

Security for loans: 

Personal 204 

United States notes and national bank notes not to be used as 432 

Semiannual return of circulation 440 

Senate : 

Comptroller appointed by the President, by and with the advice of 101 

Comptroller's report to be sent to 112 

Shareholders: 

Agent of, to return to, assets of insolvent associations 522 

Annual meeting 232 

. Appointment and qualification of agent of 522 

Assessment for impairment of capital 430 

Assets of insolvent association to be returned to, ratably after debts are paid . 517 

Consent of, necessary to extension 216 

Conversion of State banks, requirements 245 

Creditor's bill against 521 

Directors, election or appointment of , by 204, 232 

Dissenting to extension, may withdraw 219 

Duties of agent of 522 

Enforcement of assessment for impairment of capital stock 430 

Enforcing payment by, of installments 227 

Estates and funds with trustee liable for assessment 242 

Extension of corporate existence 215, 216 

Failure to pay installments 227 

Impairment of capital, assessment 430 

Increase of capital stock by 228, 229 

Individual liability of 240 

Liability, enforcement of, by receiver 515, 520 

Liability of, who have transferred their shares 241 

List of, to be kept and sent to Comptroller 439 

List of, subject to inspection 439 

Location, change of, by 211 

Names, residences, and number of shares held by each in organization 

certificate 202 

Personal liability of, in certain converted State banks 240 

Provision for election by, when 238 

Proxies, voting by 231 

Qualifications of directors 233 

Reduction of capital stock by 230 

Rights, and liabilities of, on transfer of shares 225 

Title and location of association, change of, by 211 

Vote of, necesary to place association in liquidation * 500 

Voters, qualification of 231 



INDEX TO NATIONAL-BANK ACT, ETC. 265 

Shares: Paragraph. 

Association not to own or hold its own , except 426 

Capital stock number, and name of holders to be stated in organization 

certificate 202 

Consent of owners of two-thirds, necessary to extension 216 

Converted State bank to be the same as prior to conversion 245 

Disposition of, taken for debt 426 

Fifty per cent of aggregate value of, to be paid in prior to beginning busi- 
ness 226 

Holding of, in other banks by converted banks authorized 245 

Installments, payment, and certification of 226 

List of owners of, to be kept and copy s<^;nt to Comptroller 439 

Loan on security of, prohibited 426 

Oath of director relative to 236 

Owners of two-thirds may place association in liquidation 500 

Organization certificate to state capital and number of 202 

Personal property 225, 451 

Preference in allotment of, in succeeding associations J19 

Purchased or acquired 426 

Qualifications of directors 233 

Receiver may be appointed for failure to dispose of, taken 426, 515 

Sale or forfeiture of, for failure to pay installments due 227 

Sale of, when necessary 219, 426, 430 

State taxation of 451 

Transfer of : 225 

Value of, of shareholders dissenting to extension, how ascertained 219 

Value, par, of each 225, 245 

Voting.... 231 

Signature on circulation : 

Not required for redemption of 417 

President or vice president and cashier 324 

Treasurer and Register, United States 324 

Silver: 

Construed to be lawful money, when 342 

Reserve of gold banks to gold and 342 

Silver certificates: 

Clearing-house balances payable in 729 

Denominations of 755 

Issue of, in place of Treasury notes, when 753 

Issue of, when 753, 755 

Reserve of national banks may be 729 

Silver coinage: 

Dollars 751, 753 

Subsidiary 756, 757 

Silver coins: 

Foreign, not legal tender 719 

Philippine Islands, legal tender 719 

United States, are legal tender 722, 723 

Silver dollars to remain legal tender 722, 751 

Solicitor of the Treasury, conduct of suits under direction and supervision of . . . 700 

Special acts relating to national banks 803 

Special agent. {See Agent.) 

Special customs deposits, certified checks receivable for, under certain condi- 
tions 770 

Special examination for extension of charter 217 

Special reports, authority for - 440 

Specie payments, no notes under |5 to be issued after resumption of 329 

Standard unit of value, gold dollar declared to be 749 

State banks: 

Branches of, converted 246 

Circulation of, when exempt from taxation 706 

Conversion of 245 

Examination (member banks) 527 

Penalty for failure to make return of tax on circulation 712 

Penalty for unauthorized receipt of public money 738 

Reports of, provided for HO 



266 INDEX TO NATIONAL-BANK ACT, ETC 



State banks — Continued. Paragraph. 

Return of taxable circulation 711 

Sharebolders' personal liability, exceptions 240 

Shares of, converted '. 245 

Statement of condition 110 

Tax on circulation 705 

Tax on circulation of converted 713 

Tax on unauthorized circulation 708-710 

State courts. {See Comptroller; Suits.) 

State, Territory, or District: 

Change of title or location of associations 211 

Conversion of bank organized under authority of laws of 245 

Interest, national banks not to take, etc., in excess of legal rate in 422 

"National, " use of the word in titles 530 

Qualification of directors 233 

Proceedings to enjoin Comptroller or receiver to be brought in district in 

which association is located 702 

Taxation of circulation of State, etc. , associations 705, 7l5 

Taxation of money by 716, 717 

Taxation of national banks by 451 

Stationery, etc 108 

Status not changed by extension of charter 218 

Status of associations organized under the act of 1863 247 

Statutory bad debts defined 429 

Stock: 

Amount of capital, to be stated in organization certificate 202 

Increase of capital 228 

Of national banks may be held by converted State banks 245 

Par value of 225 

Payment and certification of 226 

Purchased or acquired 430 

Keduction of capital „ . . 230 

Transfer of shares 225 

Stocks, United States, exempt from taxation 716 

Stolen national-bank notes, redemption of 417 

Subsidiary silver coinage 756, 757 

Succession: 

Expired associations 219 

Period of, national banks 204 

Suits: 

Against United States officers or agents 700 

Certified copy of organization certificate evidence in 704 

Circuit and district courts, jurisdiction of 214, 218, 701 

Corporate powers of associations 204 

Creditors' bill against shareholders 521 

Crimes, jurisdiction, etc. {See Crimes.) 

District coiu*ts, jurisdiction of; to enjoin Comptroller 701 

Enjoining Comptroller or receiver 518 

Forfeiture of charter 526 

Proceedings to enjoin Comptroller to be brought, where 702 

Sealed certificate of Comptroller competent evidence 703 

Shareholders' ajgent 522 

Shareholders' liability, to enforce 515 

Solicitor of the Treasury to direct and supervise certain 700 

Surplus: 

Converted State banks with capital of $5,000,000 240 

Creation of 424 

Loans, limit of, measured by capital and 425 

Surplus and dividends, provisions for surplus and payment of dividends 424 

Surrender of bonds. {See Bonds, United States.) 

Suspension of business after refusal to pay circulation 509 



INDEX TO NATIONAL-BANK ACT, ETC. 267 



T. 

Paragraph. 

Taking unauthorized impressions of tools, p)enalty for 744 

Tax: 

Circulation— 

Enforcing payment of 448 

Exempt from 706 

Failure to make returns 447 

Of converted State lianks 713 

Tlate and time of payment 444 

"Refunding excess 449 

Secured by Panama Canal bonds 303 

Semiannual return of 446 

Money of all kinds subject to, by States, etc 717 

Notes", State banks, corporation, company, or persons 70.5-708, 710 

Notes, State banks, corporation, company, or persons, failure to make 

returns 712 

Notes, State banks, corporation, company, or persons, semiannual return. . 711 

Provisions restricted on circulation 714 

Hemission of, on insolvent national banks 450, 715 

State taxation of national banks 451 

Taxation. {See Tax.) 
Taxes: 

Internal-revenue, on imports may be paid by certified checks 769 

Teller. {See Officers.) 
Term: 

Of office for directors 232 

For which charter is issued 204 

For which real estate may be held 224 

Territorial court. {See Comptroller; Redemption ; State, etc.) 

The national-bank act, authoritv for title 200 

Time: 

Allowed for transmission of reports of condition 440 

Deposits defined 403 

For paj-ment of assessment for impairment of capital 430 

For pa\Tnent of tax on circulation 444 

In which liquidating banks must deposit lawful money 502. 504 

In which United States bonds may be refunded 315 

Title and location, change of, by national banks 211, 213, 803 

Title of association to be approved by Comptroller of Currency 202 

Transfer of bonds 306 

Association to be notified 308 

Record of 307 

Transfer of shares of capital stock, effect of 241 

Transfer of shares of stock 225 

Transfers {see Treasurer, United States; Bonds, United States), when void 529 

Transportation charges for redeemed circulation 414 

Treasurer, United States: 

Application to sell bonds to be filed with 315 

Circulation of liquidating and insolvent banks, duty of 5U5. 606 

Circulation, tax on, to be paid to 444 

Circulation, withdrawal of, provisions for 314 

Deposits of bonds with 302 

Deposit of bonds with, to secure circulation 323 

Deposit of lawful money with, by liquidating bank i>02 

Disposition of redemption account 416 

Enforcing tax on circulation 448 

Examination of bonds and records, provisions for 309, 310, 311 

Federal Reserve Board to be furnished with list of application.^ to .sell bonds. 316 

Fine for failure to make reports to Comptroller to be retained by 443 

Interest on bonds to be retained by, when 430. 448 



268 INDEX TO NATTONAL-BANK ACT, ETC. 

Treasurer, United States — Continued. Paragraph. 

Lawful money to redeem circulation of extended banks to be deposited 

with 220 

Proceedings on default in making return on circulation subject to duty. . . 448 
Public moneys to be deposited with Assistant Treasurer, Government de- 
positaries, or 730, 731 

Piu"chase of property by receiver, approval to be filed with 524 

Receiver to pay all money received to 515 

Redemption — 

Fund to be kept with 414 

Of circulation by 414 

Of circulation in United States notes by 414 

Semiannual return to, of circulation subject to duty 446 

Signature of, on circulation 324 

Tax, excess, refunding 449 

Tax on circulation, to be paid to 444 

Transfer of bonds in trust for associations to be made to 306 

Treasury, extended banks to reimburse, cost of new plates 220 

Treasury notes: 

Cancellation of „ . . 753, 756 

Demand, legal tender 726 

Interest-bearing 727 

Issue of 318, 764 

Redeemable in gold 750 

Tax, exempt from 716 

Treasury, United States (see also Treasurer, United States): 

Association to reimburse, for cost of redemption of circulation and plates.. 414 

Currency Biu-eau in 100 

Divisions of Issue and Redemption established 752 

Notice to present circulation at 510 

Penalty for failure of associations to report, to be paid into 443, 446 

Redemption account, disposition of 416 

Redemption fund, 5 per cent, in 414 

Redemption of circulation at 312, 414, 505, 513, 514 

Trial for violation of interlocking directorate act 235 

Trust companies: 

Examinations (member) 527 

Trust, purchase of property by receiver to protect - 523 

Trustees: 

Not personally liable 242 

Power of national banks to act as 208 



INDEi TO NATIONAL-BANK ACT, ETC. 209 



tr. 

Paragraph. 

Unauthorized deposit of public money, by disbursing ofRr^'xr , . . 737 

Unauthorized receipt or use of public money by banks, etc 738 

Uncurrent notes, issue of, prohibited 431 

Uncurrent subsidiary silver, recoinage of 757 

Undivided profits not considered borrowed money 429 

Unearned dividends prohibited 429 

Unfit circulation, redemption of 414 

United States (see also Officers of the United States; Crimes, jurisdiction, etc.): 
Bonds. (See Bonds.) 

Coins are legal tender 720-724 

Courts of, may enjoin proceedings 518 

Courts, jurisdiction of, not affected 214 

Debt, deposits to redeem circulation to be reported monthly as 416 

Deposits in Federal reserve banks 615 

Deposits. (See Government depositaries.) 

Gain by failure to redeem notes by extended banks 220 

Obligations, exempt from taxation 716 

Obligation of, defined 739 

Securities, penalty for counterfeiting or forging 740 

Suits in which, is a party 700 

United States disbursing officers: 

Fraudulent notes to be marked by 748 

Penalty for unauthorized deposit of public money 737, 738 

Withdrawal of public money 730 

United States notes: 

Are legal tender 725 

Circulation of banks redeemable in 414 

Fraudulent, to be marked 748 

Issue of 764 

Obligations of United States defined 739 

Penalty for: 

Dealing in counterfeit 746 

Illegal use or possession of material for printing 745 

Passing counterfeit 743 

Pledging, etc. 432 

Taking or having unauthorized impressions of tools, etc 744. 745 

Redeemable in gold • 750 

Subject to taxation by States, etc 717 

Unit of value, gold dollar to be standard 749 

Unpaid dividends not considered borrowed money 427 

Unsigned national bank curreecy, redemption of 417 

Using plates to print notes without authority 742 

Use of circulation, restricted 428 

Use of title " National " prohibited 530 

Usury: 

Interest, when not 422 

Penalty for 423 



270 INDEX TO NATIONAL-BANK ACf, ETC. 



V. 

Paragraph. 

Vacancies, board of directors, filling Z37 

Value of capital stock of converted State banks, par 245 

Value of capital stock, par 225 

Vaults for Currency Bureau 108 

Verification of report of condition 441 

Vice president {see also Officers): 

Bonds, United States, may sign transfer of 306 

Circulation, may sign 324, 337 

Election or appointment of 204 

Proxy, not to act as 231 

Violations of provisions of national-bank act, forfeitiu-e of charter for 526 

Visitatorial powers restricted 528 

Visitatorial powers, limitation of 528 

Void, illegal preference 529 

Voluntary liquidation. {See Liquidation.) 
Vote required: 

For change of title or location 211 

For conversion of State bank 245 

For increase 229 

For liquidation 204, 500 

For reduction 230 

For shareholders' agent 522 

For voluntary' liquidation 500 

To fix date of election 238 

Voters, qualifications of shareholders at elections 231 



INDEX TO NATIONAL-BANK ACT, ETC. 271 



Paragraph. 

When receiver may be appointed 520 

Where proceedings to enjoin Comptroller must be brought 702 

Withdrawal : 

Bonds, general provisions respecting 311, 414 

Circulation, provisions for 312, 313, 314, 414 

Deposit and, of public moneys 730, 737 

Dissenting shareholders 219 

Expired associations, bonds of 221 

Illegal preference of creditors 529 

Liquidating associations, bonds of 504 

Of reserve from Federal reserve bank 409 

Reduction of capital 230 

Unearned dividends 429 

Woni-out circulation, destroying and replacing 339 



INDEX TO THE FEDERAL RESERVE ACT. 



A. 

Acceptance: Paragraph. 

Failure of national banks to signify 602e, 602f 

Of terms of act 602b 

Acceptances, bankers' 613b, 614 

Acceptances rediscounted by Federal reserve banks 613b, 613c 

Accommodation extended to member banks 604c 

Accounts: 

Foreign 614 

With other Federal reserve banks for exchange purposes 614 

Acknowledgment of organization certificate of Federal reserve banks 604a 

Act of March 14, 1900, parity provisions reaflirmed 626 

Act of May 30, 1908, certain provisions extended, etc 627 

Additional national-bank circulation 627 

Tax rate changed 627a 

Additional reserve and central reserve cities 611e 

Administrators, national banks as 611k 

Advancements extended to member banks 604c 

Ad^dsory council 612, 612a 

Agencies, foreign 614 

Agent, when bank may act as insurance agent or as broker in procuring loans 

on real estate 613c 

Agent, Federal reserve 604f 

Alaska 602,619g 

Reserve requirements for national banks in 619g 

Aldrich- Vreeland Act, effect on 627 

Amending section 5154, United States Revised Statutes 608 

Amendment to section 5202, United States Revised Statutes, liability of 

national banks 613c 

Amount of capital required for Federal reserve banks 6021 

Amount of capital stock required to be subscribed to 602c 

Amount: 

Of Federal reserve bank circulating notes not limited 618b 

Of Federal reserve notes that may be issued 616a 

Of gold notes that may be issued to Federal reserve banks 618c 

Of redemption fund required for Federal reserve notes 616d 

Of reserve required for Federal reserve notes 616b 

Of reserve required to be held by — 

Banks elsewhere than in reserve cities 619a 

Central reserve city banks 619c 

Country banks 619a 

Reserve citv banks - - 619b 

Of United States bonds that may be purchased by Federal reserve banks 

from member banks 618a 

That may be loaned on farm lands 624 

Annual report of Federal Reserve Board to House of Representatives 610g 

Application for Federal reserve notes 616a 

Application for Federal reserve notes subject to action of Federal Reserve 

Board ■•■- 616e 

Application for membership after organization of Federal reserve banks b05 

Appointment of: 

Employees of Federal Reserve Board 6lll 

Examiners ^-"^ 

Members of Federal Reserve Board 610 

.164312°— 20 18 273 



274 INDEX TO FEDERAL RESERVE ACT. 

Appropriation: Paragraph, 

For expenses of organization committee 602n 

For expenses of printing Federal reserve notes 616i 

Assessments for examiners 621a 

Assessment on Federal reserve banks: 

To pay cost of Federal reserve notes 616h 

To pay salaries and expenses of board 610b, 611 1 

Assistants to organization committee 602n 

Attorneys not to receive fee or other consideration other than usual fee or salary. 622b 
Authority of Reserve Bank Organization Committee 602a 



INDEX TO FEDERAL RESERVE ACT. 275 



B. 

Bank: Pararraph. 

Balances, net, to or from to be used in reserve calculations 619f 

Defined 601 

Examinations 621 -C22, 625n 

Bank examiners: 

Appointment of G21 

Gratuities to, prohibited 622a 

Loans to, prohibited 622a 

Powers of 621 

Salaries of 621i 

Secrecy enjoined of 622a 

Service to banks and their directors, officers, etc., restricted to official 
duties 622 

Bankers' acceptances 613b- 614 

Banks: 

Eligible G02b, 608, 609 609d 

May become national, how 608 

Not in reserve cities. {See Coimtry banks.) 

Outside continental United States 619g 

Bed pieces for Federal reserve notes 616h 

Bills of exchange: 

Acceptable by member banks 613b 

Bought by Federal reserve banks from member banks 614 

Foreign 614 

Limit to liability of national banks not to include 613c 

Open-market operations 614 

Rediscounted by Federal reserve banks 613a-613c 

Bills of State and subdivisions thereof dealt in by Federal reserve banks 614 

Bills receivable, subject to rediscount 613a-613c 

Board, held to mean Federal Reserve Board 601 

Board of directors of Federal reserve bank {see also Federal reserve bank, 

directors of) 604c-604i 

Certificate to be made by, when capital is increased or reduced 605d, 606 

Bond, Federal reserve agent 611i 

Bonds, United States: 

Dealt in by Federal reserve banks 614 

Hypothecation of, by Federal reserve banks 614 

National banks not required to deposit prior to commencement of business. . 617 

Purchase of, by Federal reserve banks 618a 

Refunding 618-618c 

To secure Federal reserve bank notes 604b 

"Two's" exchange for 1-year gold notes and 30-year gold bonds 618c 

Thirty-year 3 per cent gold, without circulating privileges 618c 

In exchange for 1-year 3 per cent Treasury notes 618d 

Branch: 

Federal reserve banks 603 

National banks — 

Foreign 625 

In dependencies 625 

By-laws of Federal reserve banks 604b 



276 INDKX TO FEDERAL BESERVE ACT. 



c. 

Paragraph. 

Cable transfers, purchase and sale of, in open market 614 

Cancellation of Federal reserve notes 616c 

Capital, amount required to enable State bank to become member bank 609f 

Capital stock of Federal reserve banks: 

Allotment of 602c, 604a 

Cancellation and redemption of 605e, 606 

Dividends 607 

Hypothecation of, prohibited when owned by member bank 605a 

Increase and decrease of 605-606 

Liability of holders ^ 602d. 606 

Maximum amount permitted to be held by any one individual or corpo- 
ration 602h 

Minimum amount of, before organization 602 1 

Net earning, apportionment of 607 

Payment for 602c, 602g, 609 

Shares of $100 each 605 

Subscriptions to^ 

After organization of Federal reserve banks 605b 

By banks 602c, 604, 619g 

By public 602g, 602h 

By State banks 604, 609, 609a 

By trust companies 604, 609, 609a 

By trust companies in District of Columbia 604, 602b, 602c 

By United States 602i 

Transfer of 602h, 602k, 605a 

Voting power of, limited 602j 

Cash reserve required: 

Banks elsewhere than in reserve cities 619a 

Central reserve city banks 619c 

Reserve city banks 619b 

Central reserve cities 602 m 

Cash reserve required 619c 

Number may be increased or decreased. 611e 

Reserve board to control 611e 

. Status of 602 m 

Certificate of: 

Increase of capital of Federal reserve banks 605d 

Organization of Federal reserve banks 604a 

Reduction of capital of Federal reserve banks 606 

Certificates of deposit as time deposits 619 

Chairman of board of directors of Federal reserve banks 604d, 604f 

Changing collateral for Federal reserve notes 616g 

Charter forfeited by national banks not accepting terms of this act 602f 

Charter of Federal reserve banks to be for 20 years 604b 

Checks receivable at par by Federal reserve banks, when 616j 

Circulating notes of: 

Federal reserve banks, issue of 618b 

Member banks, retirement of 618, 618a 

Circulation {see Federal reserve bank notes and Federal reserve notes): 

Federal reserve notes 616, 616a 

Limit to liability of national banks not to include 613c 

Civil service, President may place employees of Federal Reserve Board under. . 6111 

Class A directors 604d, 604e 

Class B directors 604d, 604e 

Class C directors 604d, 604i 

Clearing house for Federal reserve banks and member banks 6161 

Collateral for Federal reserve notes 616a 

Substitution of 616g 



INDEX TO FEDERAL RESERVE ACT. 277 

Paragraph. 

Collection charges 616k 

Collateral, limit to liability of national banks not to include 613c 

Commercial paper: 

Eligible for rediscount 6I3a 

Foreign 614 

Purchase and sale of 614 

Security for Federal reserve notes 616a 

Comptroller of the Currency: 

Duties performed under direction of the Secretary of the Treasury 610h 

Duties when Federal reserve districts have been established 604 

Examination of member banks 621 

Examiners' salaries, recommended by 621a 

Examiners' reports to 621 

Expense of examination, assessed by 621a 

Federal reserve notes, issued by 61 Id 

Federal reserve notes, unfit for circulation, to be returned to 616c 

May permit examiners to disclose information in regard to member banks. . 622b 

Member of Federal Reserve Board 610 

Member of Reserve Bank Organization Committee 602 

National-bank examiners appointed by 62 1 

Organization certificate of Federal reserve banks to be filed with 604a 

Plates, dies, etc., for Federal reserve notes under 8uper\"ision and control of. 616h 

Powers of 610h 

Salary of 610 

Suits against national banks not complying with terms of this act 602f 

Congressman not allowed to be member of Federal Reserve Board or officer or 

director 604d 

Congress, visitatorial powers of 621b 

Contracts, powers of Federal reserve banks to make 604b 

Conversion of State banks 608 

Corporate seal. Federal reserve banks 604b 

Correspondents, foreign 614 

Council, Federal ad\isory 612, 612a 

Country banks: 

Cash reserve required 619a 

Distribution of reserve 619a 

Reserve requirements for 619a 

Reserve required to be held with Federal reserve bank 619a 

Reserve that may be held with bank in reserve or central reserve city 619a 

County bonds, etc., dealt in by Federal reserve banks 614 

Currency act of Mar. 14, 1900, parity provisions reaffirmed 626 

Currency associations 627 

Ciistoms, Federal reserve notes receivable for 616 



278 INDEX TO FEDERAL RESEBVE ACT, 



D. 

Paragraph. 

Daily report by Federal reserve agent of Federal reserve notes 616a 

Definitions 601 

Demand and time deposits 619 

Demand deposits defined -». 619 

Dependencies: 

Branches of national banks in 625 

National banks in 619g 

Depositories 615 

Deposits: 

In Federal reserve banks 613, 614, 615 

Reserves against 616b 

In member banks, reserves against 619, 619f 

Limit to liability of national banks not to include 613c 

Of Government funds - . 613, 615 

Secretary of Treasury to receive deposits of gold coin or gold certificates 

tendered by Federal reserve bank or agent 616m 

Various kinds defined 619 

With Federal reserve agent of Federal reserve notes, gold, etc., by Federal 

reserve banks 616f , 616g 

"With nonmember banks, limited 619a 

Denomination of gold notes issuable to Federal reserve banks 618c 

Deputy Federal reserve agent 604f 

Description of Federal reserve notes G16c, 616h 

Destruction of Federal reserve notes 616c 

Dies, etc. , for Federal reserve notes 616h 

Directors (see Federal reserve banks, directors of): 

Branch Federal reserve banks 603 

Liability for violation of this act by national banks 602f 

Not to receive fee or other considerations for loan 622c 

Of Federal reserve banks, suspension or removal of 611f 

Discount rates: 

Established : .614 

Increased by tax on deficiency in reserve requirements 611c 

Recommendations by council 612a 

Discounts: 

By Federal reserve banks 613a 

Extended to member banks 604c 

Dissolution of: 

Federal reserve bank C04b, 607 

National member banks 602f 

Distribution of reserve : 

Banks elsewhere than in reserve city 619a 

Central reserve city, banks in 619c 

Reserve city, banks in 619b 

District: 

Bonds, etc., dealt in by Federal reserve banks 614 

Certificates showing geographical lines of Federal reserve 604 

Held to mean Federal reserve district 601 

District of Columbia, trust companies in, eligible 602b 

Dividends: 

Of Federal reserve banks 607 

Prohibited when reserve is short 619e 

Unpaid, limit to liability of national banks not to include 613c 

Doubtful assets of Federal reserve banks, ^vritten off 611g 

Drafts: 

Limit to liability to national banks, not to include 613c 

Receivable at par by Federal reserve banks, when 6l6j 

Rediscounted by Federal reserve banks 613a 

Drainage, bonds, etc., dealt in by Federal reserve banks 614 

Duties: 

Of Federal advisory council 612 

Of Reserve Bank Organization Committee 602 

Interest rate of paid directors 622e 

Securities, purchase of and sale to directors 622e 



INDEX TO FEDERAL RESEEVE ACT. 279 



E. 

Paragraph. 

Earnings, division of U07 

Election of directors of Class A and Class B 604e 

Eligible banks 602b, 608, 60&-€09d 

Employees not to receive fee or other consideration other than usual salary 6J2c 

Employees not to receive a greater rate of interest than other depositors 622e 

Employees of Federal reserve banks 604b 

Employees of Federal Reserve Board 6111 

Estimate of reserve requirements 619f 

Examiners: 

Appointment of 621 

Examiner, member bank not to make loan or grant any gratuity to 622a 

Examiner not to perform any service for compensation for any bank or 

oflBcer 622b 

Examiner not to disclose names of borrowers or collateral without first ob- 
taining written consent of Comptroller 622b 

Powers of 621 

QuaUfications of 621 

Reports of 621 

Salaries of 621a 

Examinations: 

Assessments for 621a 

Bank 621-622, 625 

Examiners to make 621 

Expense of 621a 

Federal reserve banks 621c 

Member banks 621, 621b 

National banks 621 

Number to he made 621 

Of foreign branches of national banks 625 

Of plates, dies, bed pieces, etc.. of Federal reserve notes 616h 

Qualifications of examiners 621 

State bank and trust companies 621 

Exceptions to limit to liability of national banks 613c 

Exchange, account with other Federal reserve banks for purposes of 614 

Exchange charges 616k, 6161 

Exchange of certain United States bonds for gold notes 618d 

Executive officers of Federal Reserve Board 610 

Executors, national banks as 611k 

Exempt from taxes except real estate 607a 

Exempt from taxes, gold notes issued in exchange for gold bonds 618c 

Expenses: 

For Federal reserve notes 616h, 616i 

Of examiners 621a 

Of Federal advisory council 612 

Of Federal Reserve Board 610b 

Exports, acceptances on, eligible as discounts by Federal reserve and member 

bfcnks '. 613h 

Extension of additional currency act to June 30, 1U15 t>27 



280 LNDEX TO FEDERAT, RESERVE ACT. 



F. 

Paragraph. 

Failure to accept tenns of this act 602e, 602f 

Failure to make report, penalty 609c-609d 

Farm lands, loans on 624 

Federal advisory council 612, 612a 

Federal reserve agent 604f 

Bond required of 611i 

Daily report on issue and withdrawal of Federal reserve notes 616a 

Deposits with, of Federal reserve notes, gold, etc., by Federal reserve 

banks 616f, 616g 

Deputy 604f 

Federal reserve notes issued to Federal reserve banks through , 616 

Federal reserve notes, applications for, made to 616a 

Gold coin or gold certificates to be received as deposits by Secretary of 

Treasury when tendered by Federal reserve bank or agent 616m 

Information concerning member banks to be furnished Federal Reserve 

Board by 621b 

Powers of, second to those of Secretary of Treasury 610f 

Salary of 604f 

Special examination of member banks to be approved by 621b 

Federal reserve banks 602a 

Acceptances, purchase and sale of, in open market 614 

Rediscount of 613b, 613c 

Account with other Federal reserve banks 613, 614, 6161 

Advances to, by means of Federal reserve notes 616 

Amount of capital stock to be subscribed to 602c 

Application for Federal reserve notes subject to action of Federal Reserve 

Board 616e 

Bankers' acceptances, purchase and sale of, in open market 614 

Bills of exchange — • 

Purchase and sale of 614 

Purchase from member banks 614 

Bills of State and political subdivision thereof dealt in ". 614 

Branches 603 

Foreign connections 614 

By-laws 604b 

Cable transfers, purchase and sale of 614 

Capital stock of 6021 

Certificate of organization 604 

Charter, term of 604b 

Checks received at par, when 616j 

Circulating notes, issue of 618b 

Circulating notes, redemption of 618b 

Clearing-house provisions 6161 

Collateral deposited with Federal reserve agent for Federal reserve notes. . 616a 

Increasing, to reduce liability for notes 616f 

Substitution of ." ,. 616g 

Withdrawal of 616g 

Collection charges 616k, 6161 

Commercial paper — 

Purchase and sale of 614 

Rediscount of 613a-613c 

Security for Federal reserve notes 616a, 616f , 616g 

Contracts, power to make 604b 

Corporate body 604b 

Powers of. 604b 

Council, recommendations by 612a 

Depository, Government 613, 615 



INDEX TO PEDEBAL RESERVE ACT. 281 

Federal reserve banks — Continued. 

Deposits — Paragraph. 

Defined and classified 619 

From member banks 613, 616j 

From or in other Federal reserve banks 613, 614, 616j 

From the United States 613, 615 

Reserves against 616b 

With Federal reserve agent of Federal reserve notes, gold, etc. . . 616f, 616g 

Directors 604f-604i 

Chairman of (Federal reserve agent) 604(1, 604f 

Bond required of 611i 

Chosen, how 604d, 604e, 604f 

Classification of 604d 

Compensation of 604g 

Duties of G04c 

Extension of discount, advancement and accommodations by 004c 

Number and classification of 604d 

Qualifications of 604d 

Removal of 61 If 

Suspension of 611f 

Term of 604d , 604i 

Vacancies (;04i 

Discount rates to be established fillc, 614 

Discount by Federal reserve bank of paper secured by United Slates bonds 

issued since April 24, 1917 Glim 

Dissolution of 604b. 607 

Dividends of 607 

Doubtful assets of, to be written off 611g 

Drafts, received at par, when 616] 

Earnings, divisions of 607 

Employees 604b 

Establishment of, to be officially announced by Secretary of Treasury 619 

Examination of 621c 

Examination of member banks by 621b 

Exchange charges 616k 

Exempt from taxes 607a 

Expense of Federal Reserve Board to be paid by 610b 

Federal reserve notes. (See Federal reserve notes.) 

Fiscal agent of the United States 615 

Foreign connections 614 

Franchise tax 607 

Gold bond, 30-year 3 per cent without circulating privilege 618c, 618d 

Under same general terms as United States threes without circulating 

privilege now issued 618c 

Gold coin or gold certificates to be received as deposits by Secretary of 

Treasury when rendered by Federal reserve bank or agent 616m 

Gold loans, made of, and contracted for 614 

Gold, purchase and sale of 612a, 614 

Gold notes, 1-year 3 per cent without circulating privilege GI8c, 618d 

Exempt from taxes 618c 

Government deposits 613, 615 

Hypothecation of United States bonds for gold loans 614 

Individual liability of shareholders 602d 

Liquidation of 607, 611h 

Loans made of, and contracted for 614 

Municipal securities dealt in 614 

National banks must become shareholders of 602b. 602e, 602f 

Net earnings of, apportionment of 607 

Notes of (see Federal reserve notes) 604b. 611d 

Notes of State and political subdivisions thereof dealt in 614 

OflBcers and employees 604b 

Ofl&cers of, may be removed or suspended 611f 

Open-market operations 614 

Organization of 602a, 604a, 604h 

Official announcement of, by Secretary of Treasury 619 

Powers of ". .604b, 613-614 



282 INDEX TO FEDERAL RESERVE ACT. 

Federal reserve banks — Continued. Paragraph. 

Purchase of United States bonds from member banks 618a 

Redemption fund 616c-616d, 616f 

Rediscount — 

Of acceptances 613b 

Of bills receivable 613a 

Of notes, drafts, and bills of exchange 613a 

Of paper of other Federal reserve banks 611b 

Recommendations by council 612a 

Regulations by board 611b. 613c 

Refunding United States bonds held by member banks 618-618b 

Reorganization of 611h 

Reserve required to be held with — 

By banks elsewhere than in reserve cities 619a 

By central reserve cities 619c 

By reserve city banks 619b 

Reserve requirements for Federal reserve notes 616b, 616d 

May be suspended by board 611c 

Tax on deficiency in 611c 

Reserve, withdrawal of, by member banks 619o 

Reserves — 

Against deposits 616b 

Against Federal reserve notes 61 6b. 616d 

Of member banks 619-619g 

Revenue bonds of State and political subdivisions, dealt in 614 

Safeguarding bonds, notes, collateral, funds, etc 6111 

Salaries and expenses of board paid by 610b, 611e 

Seal, corporate 604b 

Senators, Representatives, prohibited from being directors of 604d 

Special examinations of member banks may be ordered by 621b 

State banks may become members 609-609d 

State bills, notes, bonds, and warrants dealt in 614 

Statement of condition to be published weekly by board 611a 

Stockholders of, responsibility and liability of 602d, 606 

Stock of. (See Capital stock.) 

Succession of 604b 

Suits, by or against 604b 

Supervision of, by board 611a-611j 

Surplus funds 607 

Suspension of 611h 

Taxes, free from, except on real estate 607a 

Transfer of funds among, and charges therefor 616k 

United States bonds — 

Dealt in 614 

Hypothecated for gold loans 614 

United States bonds of member banks purchased by 618a, 618b 

United States deposits 613, 615 

Warrants of State and political subdivisions thereof dealt in 614 

Worthless assets to be written off 611g 

Federal Reserve Board: 

Admission of banks other than national 609-609d 

Annual report of 610g 

Application for Federal reserve notes may be granted or rejected by 616© 

Approval of, required for issue of bonds in exchange for 1-year gold notes. . . 618c 
Authorized to review decisions of Reserve Bank Organization Committee. 602 

Chairman of 610c 

Class C directors designated by 604d, 604f 

Clearing house — 

For reserve banks, designation by 6161 

For member banks, designation by 6161 

Creation of 610 

Directors of Federal reserve banks may be suspended or removed by 611f 

Discounts by Federal reserve banks, character to be determined by 613a 

Discount rates subject to approval of 614 

Doubtful or worthless assets of Federal reserve banks to be ordered written 
off books of Federal reserve banks 611g 



INDEX TO FEDERAL RESERVE ACT. 283 

Federal Reserve Board — Continued. Paragraph. 

Employees of, not in classified service (il 11 

Examinations of Federal reserve banks and member banks 611a 

Examinations ordered by 621-621c 

Examiners' salary fixed by G21a 

Expenses of, how paid 610b, 61 le 

Extension of discounts etc., by directors, sul)ject to orders of 60-lc 

Federal advisory council, expenses to be approved by 612 

Federal reserve banks may be required to purchase United States bonds 

by 618a, G18b 

Federal reserve notes issued under the supervision of 610h 

Federal reserve notes issued and retirement regulated by Gild 

Foreign branches of national banks 625 

Foreign business to be approved by 614 

Governor of 610a 

Information concerning Federal reserve banks to be furnished to, by Fed- 
eral reserve agent 621b 

Issue of Federal reserve notes regulated by 616, 616a 

Interest on rediscounts to be fi.xed by 611b 

Making farm loans 624 

Meetings of 610c 

Members of 610 

Conditions precedent on 610, 610d 

Oath of office 610, 610d 

Qualifications of 6 10a 

Removal of, by President 610 

Restriction on, during and after term of office 610, 610d 

Salaries of 610 

Term of 610 

National banks to act as trustee, etc., by permission of 611k 

Offices 610a 

Open-market operation operated by 614 

Permission for member banks to secure discounts for nonmember banks 

may be granted by 619d 

Powers of 611-611e 

Powers secondary to those of Secretary of Treasurj^ when 610f 

Power to add to list of cities prohibited from making farm loans 624 

Purchase of United States bonds by Federal reserve banks on order of 618a 

Redemption fund for Federal reserve notes to be required by 616d 

Rediflcounting of paper of Federal reserve banks by other Federal reserve 

banks 611b 

Report of, to House of Representatives 610g 

Safeguarding assets of Federal reserve banks by 6 1 li 

Special examination of member banks to be approved by 62 lb 

Substitution of collateral for Federal reserve notes to be regulated by 61 6g 

Suits against national banks not complying with terms of this act 602f 

Suspension of reserve requirements by 6 1 Ic 

Transfer of public stock in Federal reserve banks to be regulated by 602k 

Vacancies 610e 

Vice governor 6 10a 

Violations of act, of Federal reserve banks, duty of 6 1 1 h 

Federal reserve cities 602, 604 

Federal reserve banks therein G02a 

Federal reserve districts 602, G04 

Designation by number 602 

Farm land loans confined to 624 

How apportioned 602 

Increase in number of 602 

Readjustment of 602 

Federal reserve notes (obligations of United States): 

Acceptable for 616 

Application for 611b, 616a, 616e 

Authorization of 616 

Cancellation and destruction of 616c 

Character of 616c, 61Gh 

Collateral for 616a 

Coat of making, etc 616h, 616i 



284 INDEX TO FEDERAL RESERVE ACT. 

Federal reserve notes (obligations of United States) — Continued. Paragraph. 

Daily report of issue and withdrawal of 616a 

Denominations of 616h 

Deposit by bank of issue with Federal reserve agent 616f 

Description of 616c, 616h 

Destruction of 616c 

Examination of plates, dies, etc 616h 

Expense for making, issue, and redemption paid by Federal reserve 

banks 616h, 616i 

Form of 616h 

Held for distribution, where 616h 

Identification marks on 616c, 616h 

Interest paid to United States on account of 616e 

Issue and retirement of, regulated by board 611d, 616 

Liability for, may be reduced 616f 

Lien on assets 616e 

Paper for 616i 

Penalty for pacing out, by Federal reserve bank, other than bank of issue . . 616c 

Plates, dies, paper, etc 616h, 616i 

Printing of 616h, 6161 

Purpose of 616 

Receivable for ^ 616 

Received by Federal reserve bank other than bank of issue 616c 

Recommendations concerning, by council 612a 

Redeemed in gold on demand 616 

Redemption fund 616c, 616d, 616f 

Redemption of 616, 616c, 616f 

Reduction of, liability for 616f 

Reissue of notes deposited with Federal reserve agent 616f 

Reserves against 616b, 616d 

Return to bank of issue 616c 

Securities for 616a, 616b 

Substitution of collateral for 616g 

Supervision of 611d 

Federal reserv^e notes (circulating, obligations of Federal reserve banks) 604b 

For United States bonds purchased of member banks by Federal reserve 

banks 604b, 618b 

For United States bonds with circulation pri\alege against which no cir- 
culation is outstanding * . . . 604b, 618b 

Issued and redeemed as national-bank notes 604b, ^618b 

Fiscal agent of United States: 

Federal reserve banks as 615 

In foreign countries, dependencies 625 

Five per cent redemption fund not counted as reserve 620 

Foreign acceptances 614 

Foreign agencies of Federal reserve banks 614 

Foreign branches of national banks 625 

Foreign correspondents 614 

Forfeiture of charter by national banks for not accepting terms of this act 602f 

Franchise tax on Federal reserve banks 607 



INDEX TO FEDERAL RESEEVE ACT. 285 



Paraijraph 

General fund of United States may be deposited in Federal reserve banks 615 

General fund of United States Treasury may be deposited in Federal reserve 

banks 615 

General repealing clause 626 

General supervision of Federal reserve banks by board 611j 

Gold bonds, 30-year 3 per cent, without circulation privilege G18c 

Under same conditions as United States 3 per cent without circulation 

privilege now issued 618c 

Gold deposits for reduction of Federal reserve notes 616f 

Gold loans by Federal reserve banks 614 

Gold notes, 3 per cent, 1 year, without circulation privilege 618c 

Exempt from taxes GlSc 

May be exchanged for 30- year 3 per cent gold bonds G18c, 618d 

Gold, purchase and sale of, by Federal reserve banks 612a, 614 

Gold, redemption fund for Federal reserve notes to be in 616d 

Gold reserve required for Federal reserve notes 616b 

Government deposits 613, 615 

Government funds to be deposited, where 615 

Governor of Federal Reser\'e Board 610a 

Granting of application for Federal reserve notes 616e 

Gratuities to bank examiners prohibited 622a 



Paragraph. 

Hawaii, reserve requirements, etc., for national banks in 619g 

House of Representatives, annual report of Federal Reser\'e Board to 61 Og 

Hypothecation : 

Of Federal reserve bank stock by member banks prohibited 605a 

Of United States bonds by Federal reserve banks for gold loans 614 



286 IKDEX TO FEDERAL RESERVE ACT. 



I. 

Paragraph 

Imports, acceptances on, eligible as discounts by Federal reserve and member 

banks 613b 

Incidental powers necessary to comply with this act 604b 

Income from Federal reserve bank exempt from taxation 607a 

Increase of capital of Federal reserve banks 605-605d 

Individual liability of shareholders 602d 

Individual liability of stockholders of national banks 623 

Information concerning member banks to be furnished Federal Reserve Board 

by Federal reserve agent 621b 

Information, examiners not to disclose 622b 

Insohent member banks 606 

Interest rate for rediscount fixed by board 611b, 613c 

Interest rate increased by tax on deficiency in reserve requirements 611c 

Interest rates on Federal reserve notes 616e 

Invalidating clause 629 

Investment securities not eligible for discount by Federal reserve banks 613a 

Irrigation bonds, etc., dealt in by Federal reserve banks 614 

Issue of circulating notes by Federal reserve banks 618b 

Issue of Federal reserve notes 616, 616a 

Issue of gold notes of United States in exchange for certain United States bonds, 618d 



INDEX TO FEDERAL EESERVE ACT. 287 



li. 

Tarn era ph. 

Lawful money deposits for reduction of liability for Federal reserve notes 616b 

Liabilities, rights and powers of State banks when member banks 609p 

Liabilities incurred under the provisions of this act 613c 

Liabilities of national banks 613c 

Liability for Federal reserve notes, reduction of 61 6f 

Liability of director of national banks violating this act 602f 

Liability of stockholders: 

Of Federal reserve banks 602d, 606 

Of national banks 623 

Lien on assets amount of Federal reserve notes first 61 6e 

Limitations, none on amount of Federal reserve bank notes 604b 

Limit not placed on amount of Federal reserve bank circulating notes 618b 

Limit to amount of acceptance on imports and exports 613b 

By Federal reserve banks 613b 

By member banks 613b 

Limit to amount of gold notes issuable to Federal reserve banks 618c 

Limit to amount of public stock in Federal reserve bank held by one individual, 

etc 602h 

Limit to amount of United States bonds that Federal reserve banks may pur- 
chase from member banks 618a 

Limit to maturity of discounts by Federal reserve banks 613a, 613b 

Liquidating of member banks 605e 

Liquidating of Federal reserve banks , 607, 611h 

Loans of gold by Federal reserve banks 614 

Loans on farm lands 624 

Loans prohibited when reserve is short 619e 

Loans to bank examiners proliibited 622a 

Loan, no officer, director, or employe© to receive a commission for any loan 622c 



288 INDEX TO FEDERAL RESERVE ACT. 



M. 

Paragraph. 

Manager branch Federal reserve banks 603 

Market operations open 614 

Maturity of discounts of Federal reserve banks limited 613a, 613b 

Maximum amount of public stock in Federal reserve bank held by one indi- 
vidual, etc 602h 

Meetings of Federal reserve council 612 

Member banks (see also National banks) 601, 602b, 608, 609 

Acceptance rediscounted by Federal reserve bank 613b 

Acting as agent for nonmember banks, restrictions 619d 

Alaska 602, 619g 

Application for membership as, after organization of Federal reserve bank 605c 

Balances in Federal reserve banks, considered as reserve 619f 

Bills of exchange — 

Acceptable 613b 

Rediscounted by Federal reserve banks 613a, 613b 

Sold to Federal reserve banks '. 614 

Capital, amount required of State bank to become member bank 609f 

Collection charges 618a 

Depositories of United State 615 

Deposits in Federal reserve bank 613 

Deposits, reserves against 619-619b 

Deposits with nonmember bank -. 619d 

Directors not to accept fees for loans 622c 

Dividends are not to be paid when reserves are below requirements 619e 

Drafts — 

Acceptable 613b 

Rediscounted by Federal reserve banks 613a, 613b 

Examiners 621 

Examinations of , 621b 

Examinations of Federal reserve banfcs on request of 10 member banks 62lc 

Exchange charges - 616k 

Hypothecation of stock of Federal reserve banks prohibited 605a 

Individual liability of - 602d 

Insolvency of 606 

Insurance agent, when may act as 613c 

Limit to deposits that may be kept with nonmember banks 619d 

Liquidation of - 605e 

Loans and gratuities to bank examiners prohibited 622a 

Loans may not be made when reserves are below requirements 619e 

Loans on real estate 624 

National banks {see National banks) 602c-602f 

608 

Notes rediscounted by Federal reserve banks 613a, 613b 

Officers and employees not to accept fees, etc 622c 

Outside continental United States 619g 

Prohibited from securing discounts from Federal reserve banks for non- 
member banks - 619d 

Provisions for national banks outside continental United States to become . . 619g 

Real estate, when bank may act as broker in procuring loans on 613c 

Refunding United States bonds securing circulation 618, 618a 



INDEX TO FEDERAL RESEIIN K ACT. 289 

Paragraph. 

Report of condition by G09c 

Report of earnings and dividends by (JOOc 

Reserve recjuirements 611m, 6H>-fi20 

Reserve, withdrawal of, from Federal reserve banks G19e 

Reserves 619-619f 

Against deposits G19-6l9f 

Balances in Federal reserve banks considered as 61 9f 

Banks in central reserve cities (i 1 9c 

Banks in reserve cities GlOb 

Banks not in central reserve or reserve cities 619a 

Checking against, in Federal reserve banks 619e 

Net balance due to and from other banks considered in estimating 619f 

State banks as G09 

Withdrawal from Federal reserve bank 609e 

Deposits with nonmember banks 619d 

Examinations of 621 

Member banks, rights, powers, and liabilities of 609g 

Stock in Federal reserve banks 602c, 604 

605 

Transfer of stock in Federal reserve banks G02k, 605a 

Trust companies as 609 

Deposits with nonmember banks 619d 

Examinations of '. 621 

Withdrawal from Federal reserve bank 609e 

Trust companies in District of Columbia 602b 

Members, Federal advisory council 612 

Minimum amotint of capital of Federal reserve banks 6021 

Mints, Federal reserve notes may be deposited in GlGh 

Mortgages on farm lands G24 

Municipal securities dealt in by Federal reserve banks 614 

164.312°— 20 1^ 



290 INDEX TO FEDERAL RESERVE ACT. 



N. 
National banking associations: Paragraph. 

Defined 601 

Examiners of 621 

Reserve requirements 619 

Reserve requirements outside continental United States 619g 

National-bank examiners (see also Examiners) : 

Prohibited from performing other services for banks, etc 622b 

Prohibited from receiving loans or gratuities from member banks 622a 

National banks (see also Member banks) 601 

Administrators 611k 

Alaska 602, 619g 

Branches in foreign countries and dependencies 625 

Capital stock — 

Decrease of 605d, 606 

628 

Increase of 605a, 605d 

Charter bonds no longer required 617 

Circulation — 

Act of May 30, 1908, extended 627 

Retirement of 618 

Tax rate for certain circulating notes changed 627a 

Commencing business, pro\'i8ions for deposit of United States bonds vtith 

Treasury repealed 617 

Dependencies 619g 

Deposits, time, and interest thereon 624 

Directore' liability 602f 

Dissolution for failure to enter system 602f 

Executors 611k 

Foreign branches 625 

Hypothecation of stock in Federal reserve banks 605a 

Liability of 613c 

Loans on farm lands 624 

Mortgages on farm lands 624 

Must become member banks 602b, 602e 

Notes of — 

Liability for cost of, unaffected 616i 

May be retired 618, 618a 

Other banks may become 608 

Outside continental United States ^^% 

Penalty for failure to enter system 602e, 602r 

Philippine Islands 619g 

Redemption fund for notes not counted as reserve 620 

Refunding bonds 618, 618a 

Registrar of stocks and bonds 611k 

Required to become member banks 602b, 602e 

602! 

Retirement of circulating notes 618, 618a 

State banks may convert to 608 

Stock in Federal reserve bank 602c, 604 

605 

Stockholders, responsibility and liability 602f , 623 

Surplus, increase or decrease of 605 

Time deposits and interest thereon 624 

Transfer of stock in Federal reserve banks 602k, 605a 

Trustees 611k 

National currency association 627 



INDEX TO FEDERAL RESERVE ACT. 29] 

Nonmember banks: Paragrraph. 

Alaska 619g 

Amount of deposits that may be kept with nonmember banks restricted 619d 

Deposits with 619d 

Discounts from Federal reserve banks not allowed through member banks . . 619d 
Member banks may not act as agents for, in applj-ing for or receiving dis- 
counts from Federal reserve banks 619d 

Outside continental United States 619g 

Nonmember national hanks, reserve requirements 619g 

Notes: 

Federal reserve. (See Federal reserve notes.) 

Of State or political subdivisions thereof dealt in by Federal reserve banks. 614 

Rediscounted by Federal reserve banks 613a, 613b 

Treasury, 1-year 3 per cent, coupon or registered 618c 

Exempt from taxes 618c 

May be changed for 30-year 3 per cent gold bonds 618c, 618d 

Number of examinations to be made 621 

Number of Federal reserve cities 602 



292 INDEX TO FEDEEAL RESERVE ACT. 

O. 

Paragraph. 

Obligation of Federal reserve banka to purchase gold notes 618c 

Obligations of Federal reserve banks, circulating notes are 618b 

Obligations of United States, Federal reserve notes 616 

Officers and employees of Federal reserve banks 604b 

Officers not to receive fee or other consideration for loan _ 622c 

Officers, rate of interest paid on deposits : - 622e 

Officers of Federal reserve banks, suspension or removal of 611f 

Open-market operations 614 

Recommendations by council 612a 

Organization certificate of Federal reserve banks 604a 

Organization committee. {See Reserve Bank Organization Committee.) 
Other reserve cities. {See Reserve cities.) 



INDEX TO FEDERAL RESEBVE ACT. 293 

P. 

Paragraph. 

Panama, reserve requirements, etc., for national banks in 619g 

Paper for Federal raserve notes GI61 

Parity maintained G20 

Par, when checks and drafts receivable by Federal reserve banks at G16j 

Payment of expenses of organization committee 602n 

Payments of capital stock subscriptions 602c 

Penalties: 

Acceptance of fees, etc., by directors, officers, and employees of member 

banks ". 622c 

Divulging information by bank examiners 622b 

Failure to make report 609c, 609d 

Gratuities to bank examiners 622a 

Loans to bank examiners 622a 

Member banks not national banks for failure to comply with conditions, 

etc ^ 609c, 609d 

National banks failing to comply with provisions of this act 602e, 602f 

Paying out Federal reserve notes by Federal reserve banks other than bank 

of issue 616c 

Reserve shortage 619e 

Violation of section 22, Federal reserve act 622f 

Violations of act by Federal reserve banks 61 Ih 

Period for which Federal reserve bank charter is issued G04b 

Philippine Islands: 

Bank in, may not become member bank 6 I9g 

Public funds in United States to be deposited in member banks 615 

Reserve requirements for national banks in 619g 

Plates, dies, etc., for Federal reserve notes 616n 

Political subdivisions, bonds, etc., dealt in by Federal reserve banks 614 

Porto Rico, reserve requirements, etc., for national banks in 619g 

Postal savings funds to be deposited in member banks 6 15 

Powers of: 

Examiners 621 

Federal advisory council 612a 

Federal reserve banks 604b, 613-6 14 

Federal Reserve Board 611-6111 

Not to conflict with those of Secretary of Treasury 61 Of 

Reserve Bank Organization Committee 602 

State bank as member bank 609g 

President may place Federal Reserve Board employees under civil service. . . 6111 
President of United States, members of Federal Reserve Board appointed 

by 610, 610e 

Printing Federal reserve notes 616h 

Prohibitions: 

Central reserve city banks from making farm loans 624 

Gratuities and loans to bank examiners 622a 

Member banks limited in amount of deposits with and forbidden to secure 

discounts from Federal reserve banks for normiember banks 619d 

Members of Federal Reserve Board, Assistant Secretary of Treasury, and 
Comptroller of Currency not to hold olTice in any member bank. . . 610, 610d 

National-bank examiners not to perform other services for banks, etc 622b 

Officers and employees, from receiving fee for loan 622c 

Public funds 01 Philippine Islands, postal savings, or any Government 

funds not to be deposited in any bank other than member bank 615 

Reserve shortage 619e 

Restrictions as to visitatorial powers 621b 

Senators and Representatives not allowed to be members of Federal Re- 
serve Board or director of Federal reserve bank ()04d 

Transacting business by Federal reserve bank until authorized by Comp- 
troUer 604b 



294 INDEX TO FEDERAL RESERVE ACT. 

Paragraph. 

Profits, iindivided, limit to liability of national bank not to include 613c 

Pro\Tsions for national banks outside continental United States to bec;ome 

member banks 619g 

Public dues, Federal reserve notes receivable for 616 

Public Federal reserve bank stock 602g 

Amoimt of, limited to any one individual or corporation 602h 

Liability of holders o^ ()02d, 602g 

Par value of 602g, 605 

Payment for 002c, 602g 

Tax free 607a 

Transfer of 602h 

Voting power, none 602j 

Purchase of: 

Bills of exchange from member banks 614 

Gold notes by Federal reserve banks 618c 

United States bonds by Federal reserve banks 618a 



Q. 

Paragraph. 
Qualification of examineis 621 



INDEX TO FEDERAL RESERVE ACT. 295 

R. 

Parapraph. 

Rate of taxation on "additional currency " fi27a 

Rates of discount (iilb, 6Uc, 014 

Rates of interest on Federal reserve notes 616e 

Real estate loans G24 

Reclamation bonds, etc., dealt in by Federal reserve bank G14 

Redemption fund: 

In United States Treasury for Federal reserve notes G16c, 616d, 016! 

Not counted aa reserve (5 per cent, of national banks) 020 

Of Federal reserve notes G18b 

Redemption of Federal reserve bank circulating notes 618b 

Rediscount by Federal reserve banks: 

Acceptances G13b 

Bills of exchange 013a 

Bills receivable 613a 

Drafts 013a 

Notes .' 013a 

Paper discounted by other Federal reserve banks 01 lb 

Paper, rediscounted, as collateral for Federal reserve notes 010a 

Recommendations by council 012a 

Regulations by board 611b, 613c 

Reduction : 

Of capital of Federal reserve bank 605, 605d, 606 

Of liability for Federal reserve notes 616f 

Refunding bonds 618-018c 

Registrar of stock and bonds, national bank as Ollk 

Regulations : 

For Federal reserve notes Gild 

For transfer of funds and charges therefor among Federal reserve banks 01 Ok 

For transfer of public stock in Federal reserve banks 002k 

To be prescribed by organization committee 002b 

Reissue of Federal reserve notes deposited mth Federal reserve agent 01 Of 

Rejection of application for Federal reserve notes 01 Oe 

Removal or suspension of officer or director of Federal reserve bank 01 1 f 

Reorganization of F'ederal reserve banks (> 1 1 b 

Repealing clause, general 020 

Report of board to House of Representatives OlOg 

Report of condition by Federal reserve banks, weekly Oil a 

Report of condition by member banks 609c> 

Report of earnings and dividends by member banks G09r 

Reports: 

Of examination 021 

Of foreign branches of national banks 025 

Representatives not allowed to become members of Federal Reserve Board or 

directors of Federal reserve banks 604d 

Requiring national banks to become member banks 602b 

Reserve banks held to mean Federal reserve banks 001 

Reserve bank organization committee 002 

Admission of banks other than national banks 009, 009a 

Allota stock of Federal reserve banks to United States G02i 

Appropriation for expenses of 002n 

Certificates showing districts to be filed ^vith Comptroller 004 

Designates Federal reserve cities and districts 002, 002a 

Exercises jiowera of chairman of Federal Reserve Board until such is 

appointed 004.1, 004e. 004h 

General powers of 602a, 002n 

How constituted 002 

Majority a quorum 602 

Offers stock of Federal reserve bank to public <'02g 

Organizes each Federal reserve bank 002a 



296 IXDEX TO FEDERAL EESERVE ACT. 

Paragraph. 

Reserve cities 602m 

Cash reserve required 619b 

Distribution of reserve 619b 

Federal Reserve Board to control 611e 

Number may be increased or decreased 611e 

Reserve requirements 619b 

Reserve that may be held with, by banks elsewhere than in reserve cities. 619a 

Reserve districts. {See Federal reserve districts.) 

Reserve requirements of Federal reserve banks' 

Against deposits 616b 

Against Federal reserve notes 616b, 616d 

Suspension of, by board 611c 

Tax on deficiency in 611c 

Reserve requirements of member banks 619-619f 

Banks in central reserve cities 619c 

Banks in reserve cities 619b 

Banks not in central reserve or reserve cities 619a 

Country banks 619a 

Central reserve cities 619c 

Estimate of 619f 

Redemption fund not counted as reserve 620 

Recommendations by council 612a 

Reserve cities other than central 619b 

To be held with Federal reserve banks 619d 

■^Tien effective 619 

Reserve : 

That may be held with member banks 619a, 619b 

Withdrawal of, from Federal reserve banks 619e 

Reserves, tax on deficiency in 611c 

Increase rates of interest and discount 611c 

Restriction, ^dsitatorial powers limited 621b 

Retirement of: 

Federal reserve notes 611d 

National-bank notes 618, 618a 

Revenue bonds of State or political subdivisions thereof dealt in by Federal 
reserve banks 614 

Rights of State bank when member bank 609f 



INDEX TO FEDERAL RESERVE ACT. 297 

S. 

Paragraph. 

Safeguarding assets of Federal reserve banks 61 li 

Salaries: 

Of examiners C21a 

Of Federal Reserve Board employees 6111 

Of members of Federal Reserve Board 610 

Salary : 

Director Federal reserve bank 604g 

Federal reserve agent 604f 

Savings accounts as time deposits 619 

Seal of Federal reserve bank 604b 

Secretary' of Agriculture, member of Reserve Bank Organization Committee... 602 
Secretary of Tre^ury: 

Amount of redemption fund for Federal reserve notes determined by 616d 

Assistant, restrictions on, subject to term 610 

Circulating notes of Federal reserve banks, form to be prescribed by 618b 

Chairman of Federal Reserve Board 610c 

Deposit of Government funds upon direction of 615 

Deposit of gold coin or certificates to be received when tendered by Fed- 
eral reserve bank or agent 616m 

Earnings from Federal reserve banks to be used under regulations pre- 
scribed by 607 

Examiners' appointment to be approved by 621 

Gold notes and bonds issued in exchange for certain United States bonds 

by 618c, 618d 

Maintaining of parity 626 

Member of Federal Reserve Board 610 

Member of Reserve Bank Organization Committee 602 

Payment of expenses of Organization Committee to be approved by 602n 

Plates, dies, etc., for Federal reserve notes engraved by direction of 616h 

Powers heretofore vested in, unchanged ." 610f 

Redemption fund for Federal reserve notes controlled by 616c 

Redemption fund required by 615 

Strengthening gold reserves 626 

Section 5154, United States Revised Statutes, amended 608 

Section 5202, United States Revised Statutes, amended 613c 

Securities: 

Dealt in by Federal reserve banks 614 

Purchase and sale of, recommended by council 612a 

Security: 

For Federal reserve notes 616a, 616b 

For gold transactions 614 

Senate, members of Federal Reserve Board to be confirmed by 610 

Senators and Representatives not allowed to be members of Federal Reserve 

Board or officers or directors of Federal reserve banks 604d 

Shareholders of Federal reserve banks, liability of 602d, 606 

Short title, "Federal Reserve Act" 600 

Special examination of foreign branches of national banks 625 

State banks as member banks 601 , 609, 609d 

Amount capital required to become member bank 609f 

Deposits with nonmember banks 619d 

Examinations of 621 

Requirements precedent G09a 

Requirements subsequent 609b, 609c 

Withdrawal from membership in Federal reserve bank 609e 

Subscription to stock 609 

Surrender of privileges G09d 



298 INDEX TO FEDERAL RESERVE ACT. 

Paragraph 

State banks may become national banks 608 

State revenue bonds, warrants, etc., dealt in by Federal reserve banks 614 

Statement of condition of Federal reserve banks, weekly 611a 

Strengthening gold reserves of the United States 626 

Stock of Federal reserve banks. (See Capital stock.) 

Stockholders of Federal reserve banks, liability of 602d, 606 

Stockholders of national banks, responsibility and liability of 602f, 623 

Subscription to capital stock of Federal reserve banks: 

After organization of Federal reserve banks 605b 

By banks 602c, 604 

By public 602g 

By State banks 604, 609, 609a 

By trust companies 604, 609, 609a 

By trust companies in the District of Columbia 602c, 604 

By United States 602i 

Substitution of collateral for Federal reserve notes 616g 

Sub treasury , Federal reserve notes may be deposited in 616h 

Succession of Federal reserve banks 604b 

Suits against national banks not complying with terms of this act 602f 

Suits by or against Federal reserve banks 604b 

Supervision of: 

Federal reserve banks by board 611j 

Federal reserve notes 611d 

Siu-plus funds of Federal reserve banks 607 

Free from taxation 607a 

On dissolution or liqmdation 607 

Suspension: 

Of Federal reserve banks 611h 

Of reserve requirements by Federal Reserve Board 611c 

Or removal of officers or directors of Federal reserve banks 6111 



INDEX TO FEDERAL RESERVE ACT. 299 



T. 

Taxes: Paraj^raph. 

Federal reserve banks free from, except on real estate 607a 

Federal reserve notes receivable for 616 

For paying out Federal reserve notes by bank other than bank of issue 616c 

Franchise, on Federal reserve banks 607 

Gold notes, 1 year, 3 per cent, without circulation privilege, free from 618c 

Income on capital stock and surplus of Federal reserve banks free from. . . 607a 

On deficiency in reserve requirements 611c 

Rates of, for certain circulating notes of national banks, changed 627a 

Term of office for directors of Federal reserve banks 604d, 604i 

Time deposits defined 619 

Time deposits in national banks 624 

Title "Federal reserve act" 600 

Transfer of Federal reserve stock 602h, 602k, 605a 

Transfer of national bank stock, effect of, on liability of stockholder 623 

Treasiirer of United States: 

Application to, for retirement of circulating notes by member banks.. 618, 618a 

Expenses of organization committee payable by 602n 

Federal reserve notes received by 616c 

Quarterly report to Federal Reserve Board of applications to sell bonds. . . 618a 
Treasury Department: 

Federal reserve notes redeemable at 616 

Federal reserve notes may be deposited in 616h 

Treasury gold notes issuable to Federal reserve banks in exchange for certain 

United States bonds 618c, 618d 

Trust companies: 

As member banks. {See State banks as member banks) 601, 602b, 608, 609d 

In District of Colunabia 602b 

(Member) examinations 621 

Withdrawal from membership in Federal reserve bank 609e 

Trustees, national banks as 611k 



300 INDEX TO FEDERAL RESERVE ACT, 



u. 

Uiiited States: Paragraph, 

Applications to sell bonds 618 

Deposits in banks 615 

Earnings of Federal reserve banks accruing to 607 

Federal reserve notes, obligations of 616 

Treasurer, quarterly report to Federal reserve bank of 618a 

United States bonds {see also Bonds, United States): 

Charter requirements for national banks repealed 617 

Dealings in, by Federal reserve banks 614 

Discount by Federal reserve bank of paper secured by United States bonds 

issued since April 24, 1917 611m 

Hypothecation of, for gold by Federal reserve banks 614 

Refunding 618-618c 

Purchase of, by Federal reserve banks 618a 

Thirty-year 3 per cent gold, exchanged for 1-year 3 per cent Treasury 

notes 618c, 618d 

Twos exchanged for 1-year 3 per cent gold notes 618c 

Twos exchanged for 30-year 3 per cent gold bonds 618c 

United States deposits of Government funds 613, 615 

United States Federal reserve bank stock 602i 

Unpaid dividends, limit to liability of national banks not to include 613c 

Undivided profits, limit to liability of national banks not to include. ........ 613c 



INDEX TO FEDERAL RESERVE ACT. 301 



V. 

Parafn^aph. 

Vacancies in membersliip of Federal Reserve Board GlOe 

Vice governor of Federal Reserve Board GlOa 

Violation of provisions of act 602f, 609d 

Visitatorial powers over banks restricted 621b 

Vote required to convert State bank to a national bank 608 

Voting power of Federal reserve bank stock 602j, 604e 



W. 

Warrants of State or political subdivisions thereof dealt in by Federal reserve 

banks 614 

Weekly statement of condition by Federal reserve banks 611a 

Withdrawal from membership in Federal reserve bank by State bank or trust 

company 609e 

Withdrawal of: 

Collateral for Federal reserve notes 616g 

Of reserve from Federal reserv'e banks 619e 

Worthless assetfl of Federal reserve banks to be written off 611g 



INDEX TO SECTIONS OF REVISED STATUTES. 



Section. 



324 

325 

326 

327 

328 

323 

330 

331 

332 

333 

330 

736 

884 

885 

3408 

3411 

3412 

3413 

3414 

3415 

3416 

3417 

3583 

3584 

3585 

3586 

3587 

3588 

3589 

3590 

3620 

3640 

3641 

3642 

3643 

3644 

3645 

3646 

3647 

3648 

3649 

3701 

302 



Page. 



11 
11 
12 
12 

12 

13 

13 

13 

13 

13 

181 

182 

182 

182 

182 

182 

183 

183 

183 

184 

184 

184 

185 

186 

186 

186 

186 

186 

187 

187 

188 

42 

42 

42 

42 

42 

42 

42 

42 

42 

42 

185 



Section. 



3847 
4046 
5133 
5134 
5135 
5136 
5137 
5138 
5139 
5140 
5141 
5142 
5143 
5144 
5145 
5146 
5147 
5148 
5149 
5150 
5151 
5152 
5153 
5154 
5155 
5156 
5157 
5158 
5159 
5160 
5161 
5162 
5163 
5164 
5165 
5166 
5167 
5168 
5169 
5170 
5171 
5172 



Page. 



188 
188 
20 
20 
20 
21 
32 
32 
32 
33 
33 
34 

34, 177 
34 
35 
35 
40 
40 
40 
40 
40 
41 
42 

43, 131 
44 
44 
50 
50 

51, 156 
51 
52 
52 
53 
53 
53 
53 
54 
58 
59 
59 
59 
61 



Section. 


Page. 


5173 


61 


5174 


62 


5175 


62 


5176 


62 


5177 


62 


5178 


63 


5179 


63 


5180 


63 


5181 


63 


5182..... 


63, 187 


5183 


63 


5184 


64 


5185 


64 


5186 


65 


5187 


65 


5188 


66 


5189 


66 


5190 


70 


5191 


72 


5192 


73 


5193 


80 


5194 


80 


5195 


80 


5196 


80 


5197 


80 


5198 


81 


5199 


81 


5200 


81 


5201 


83 


5202 


83, 146 


5203 


84 


5204 


84 


5205 


84 


5206 


85 


5207..... 


85 


5208 


86 


5209 


87 


5210 


90 


5211 


90 


5212 


91 


5213 


92 


5214 


92 



Section. 



5215 
5216 
5217 
5218 
5219 
5220 
5221 
5222 
5223 
5224 
5225 
5226 
5227 
5228 
5229 
5230 
5231 
5232 
5233 
5234 
5235 
5236 
5237 
5238 
5239 
5240 
5241 
5242 
5243 
5413 
5414 
5415 
5430 
5431 
5432 
5433 
5434 
5437 
5488, 
5497 



Page. 

93 
94 
94 
94 
95 
99 
99 
100 
100 
101 
102 
102 
103 
103 
104 
104 
104 
105 
105 
105 
106 
106 
106 
107 
111 
112, 161 
113 
113 
113 
191 
192 
192 
192 
193 
194 
194 
194 
194 
191 
191 



o 



UNIVERSITY OF CALIFORNIA AT LOS ANGELES 

THE UNIVERSITY LIBRARY 
This "book is DUE on the last date stamped below 



Form L-9 
aOm-1, •41(1122) 



J3 



HG 

^.gs^iJ. S. 

^.5 5 c4-ftf.utes. etc. -_ 
-j_920 The National- 

bank act-^as-^ — 

amende d< 




000 552 655 




HG 

2547 

A55 

1920